Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to: (a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments; (b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses; (c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities; (d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000; (e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000; (f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate; (g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock; (h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans; (i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate; (j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period; (k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP; (l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount; (m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date; (n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement; (o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries; (p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied; (q) take any action that would violate the CIA; (r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or (s) agree, authorize or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Encore Medical Corp), Merger Agreement (Compex Technologies Inc)
Interim Operations. The Company covenants and agrees Except as to itself and its Subsidiaries thatset forth in the ▇▇▇▇▇▇▇ Disclosure Letter, after in the case of ▇▇▇▇▇▇▇, the Cardiac Disclosure Letter, in the case of Cardiac, or as otherwise expressly contemplated hereby, without the prior consent of the other party (which consent shall not be unreasonably withheld or delayed), from the date hereof and prior to until the Effective Time (unless Parent Time, ▇▇▇▇▇▇▇ and Cardiac shall, and shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, cause each of the Company and its their respective Subsidiaries shall to, conduct its their business in all material respects in the ordinary course consistent with past practice and it shall use commercially reasonable efforts to (i) preserve intact its present business organization organization, (ii) maintain in effect all material licenses, approvals and authorizations, including, without limitation, all material licenses and permits that are required by applicable Laws for the operation of its business and (iii) preserve existing relationships with third parties its key employees, its key agents, and keep available the services of its present officers material customers, lenders, suppliers and employeesothers having material business relationships with it. Without limiting the generality of the foregoing, except as set forth in the ▇▇▇▇▇▇▇ Disclosure Letter, in the case of ▇▇▇▇▇▇▇, or the Cardiac Disclosure Letter, in the case of Cardiac, or as otherwise expressly contemplated by this Agreement, from the date of this Agreement hereof until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 without the prior consent of the Company Disclosure Letterother party, the Company will not and will not neither ▇▇▇▇▇▇▇ nor Cardiac shall, nor shall either permit any of its Subsidiaries to:
(a) adopt or propose any change in amend its articles certificate of incorporation or bylaws (or other applicable similar governing instrumentsdocuments);
(b) merge take any action that would prevent or consolidate materially impair the Company ability of it to consummate the transactions contemplated by this Agreement, including actions that would be reasonably likely to prevent or materially impair its ability to obtain any consent, registration, approval, permit or authorization required to be obtained from any Governmental Entity prior to the Effective Time in connection with the execution and delivery of this Agreement and the consummation of the Mergers and the other transactions contemplated by this Agreement;
(c) split, combine or reclassify any shares of its capital stock or any of its Subsidiaries with which are not wholly-owned or declare, set aside or pay any dividend or other Persondistribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock or any securities of any of its Subsidiaries which are not wholly-owned, or restructureredeem, reorganize or completely or partially liquidate repurchase or otherwise enter into acquire or offer to redeem, repurchase, or otherwise acquire any agreements of its securities or arrangements imposing material changes or restrictions on any securities of any of its assets, operations or businessesSubsidiaries which are not wholly-owned;
(cd) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, deliver or sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee delivery or encumbrance sale of, any shares of its capital stock of the Company any class or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stockfor, or any optionsrights, warrants or other rights of options to acquire, any kind to acquire any shares of such capital stock or any such convertible securities, other than (A) the issuance of ▇▇▇▇▇▇▇ Common Shares or exchangeable securities;
(d) materially and adversely modifyCardiac Common Shares, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence as the case may be, upon the exercise of stock options outstanding on the date hereof, (B) the issuance of stock options in the ordinary course of business to purchase up to 75,000 ▇▇▇▇▇▇▇ Common Shares or 350,000 Cardiac Common Shares, as the case may be, pursuant to the ▇▇▇▇▇▇▇ Stock Plans or Cardiac Stock Plan, as the case may be, in accordance with their present terms except that no such stock options shall be issued to any executive officer of ▇▇▇▇▇▇▇ or Cardiac; and (C) the issuance of ▇▇▇▇▇▇▇ Common Shares pursuant to the ▇▇▇▇▇▇▇ ESPP;
(e) other than expenses incurred in connection with this transaction such as reasonable legal and accounting expenses, and investment banking expenses, incur any capital expenditures or any obligations or liabilities in respect thereof, except for those (i) except contemplated by its capital expenditure budget, (ii) incurred in the ordinary course of business, or (iii) not otherwise described in clauses (i) and/or (ii) if consummation which are not in excess of the an aggregate of $100,000;
(f) acquire (whether pursuant to merger, stock or asset purchase or otherwise) in one transaction or series of related transactions contemplated by this Agreement any assets of or compliance by the Company with the provisions of this Agreement will conflict with, or result equity interests in any violation Person;
(g) sell, lease, license, encumber or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration otherwise dispose of any obligation or to a loss of a material benefit underassets (including, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; providedwithout limitation, howeverintellectual property rights), that the foregoing shall not prohibit entering into, modifying or renewing the Contracts other than (i) in the ordinary course of business to consistent with past practice, (ii) equipment and property no longer used in the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any operation of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
business, and (fiii) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend sales or other distribution, payable in cash, stock, property or otherwise, with respect dispositions of assets related to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stockdiscontinued operations;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security securities or guarantee any debt securities of others or request any advances in respect of, or make any drawdowns on, any existing indebtedness which advance or drawdown (together with other advances or drawdowns made after the Company date of this Agreement) exceeds $100,000 in the aggregate;
(i) enter into, amend, modify or terminate any of its Subsidiariesmaterial contract, agreement or arrangement or otherwise waive, release or assign any material rights, claims or benefits thereunder, except for indebtedness for borrowed money incurred in the ordinary course of business;
(i) except in the ordinary course of business consistent with past practices (i) not practice, or as required by Law or by an agreement existing on the date hereof, increase the amount of compensation of any director or executive officer or make any increase in or commitment to exceed $200,000 in the aggregateincrease any employee benefits, (ii) in replacement of except as required by Law or by an agreement existing indebtedness for borrowed money on terms substantially consistent with the date hereof, adopt any severance program or more beneficial than the indebtedness being replacedgrant any material severance or termination pay to any director, officer or employee, (iii) guarantees incurred adopt or implement any employee retention program or other incentive arrangement not in compliance with this Section 6.1 by existence on the Company of indebtedness of wholly-owned Subsidiaries of the Company date hereof or amend in any material respect such program or arrangement, (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize adopt any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or proceduresadditional employee benefit plan or, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, make any material contribution to any existing plan (other than as required by Law or such plan), or (v) except as may be required by Law or pursuant to Contracts in effect prior to any agreement existing on the date of this Agreementhereof, amend in any material respect any ▇▇▇▇▇▇▇ Employee Plan or Cardiac Employee Plan, as the case may be;
(ok) change its (x) methods of accounting in effect at December 31, 2004, except as required pursuant to existing written, binding agreements by changes in GAAP or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) by Regulation S-X of the Company Disclosure LetterExchange Act, as concurred in by its independent public accountants or as otherwise required by applicable Law, (iy) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, fiscal year;
(iil) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, than in the ordinary course of business consistent with past practice practice, (iii) establish, adopt, amend make any Tax election or terminate enter into any Benefit Plan settlement or amend the terms compromise of any outstanding equity-based awards, (iv) take any action Tax liability that in either case is material to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesbusiness;
(pm) take pay, discharge, settle or satisfy any action claim, liability or omit to take any action that is reasonably likely to result in any obligation (absolute, accrued, asserted or unasserted, contingent or otherwise) other than (y) for an amount of the conditions to the Merger set forth in Article VII not being satisfied$100,000 or less, or (z) ordinary course repayment of indebtedness or payment of contractual obligations when due;
(qn) commence any Action other than in accordance with past practice, or settle or propose to settle, any Action for material money damages or restrictions upon its operations;
(o) take any action that would violate the CIA;
(r) knowingly take or permit cause any of its Subsidiaries representations and warranties herein to take become untrue in any action that is reasonably likely to prevent the consummation of the Mergermaterial respect; orand
(sp) agree, authorize resolve or otherwise commit to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Cardiac Science Inc), Merger Agreement (Quinton Cardiology Systems Inc)
Interim Operations. The Company covenants (a) Between the Execution Date and agrees the Closing Date or the earlier termination of this Agreement in accordance with Article IX (the “Interim Period”), except (y) as to itself and its Subsidiaries that, after set forth on Section 7.01 of the date hereof and prior to the Effective Time Disclosure Schedule or (unless Parent shall z) as otherwise approve in writing) and except as expressly contemplated or required by applicable Laws or as provided for in this Agreement, unless Purchaser has previously expressly consented in writing or to the extent required by Applicable Law, each Seller will, and will cause the Company and GSC to, (i) conduct its operations in the ordinary course of business and in accordance with Applicable Law, (ii) use commercially reasonably efforts to preserve and maintain the current business, assets, properties, organization and goodwill of the Company and its Subsidiaries shall conduct its business GSC, (iii) maintain books, accounts and records of the Company and GSC in the ordinary course consistent accordance with past practice practice, and it shall (iv) use commercially reasonable efforts to preserve intact its business organization and maintain the present relationships with third parties customers, suppliers, Governmental Entities, lenders and keep available others having business dealings with the services of its present officers and employees. Company and/or GSC.
(b) Without limiting the generality of the foregoing, from during the date of this Agreement until the Effective TimeInterim Period, except (Ay) as set forth on Section 7.01 of the Disclosure Schedule or (z) as otherwise expressly permitted contemplated or required by this Agreement, (B) as Parent may approve unless Purchaser has previously expressly consented in writing (such approval or to the extent required by Applicable Law, Sellers shall not, and shall cause the Company and GSC not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 to, do any of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries tofollowing:
(ai) adopt or propose make any amendment, modification, change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock Organizational Documents of the Company or GSC (or waive compliance with any its Subsidiariesmaterial provision thereof);
(ii) (A) authorize, issue, pledge, suffer any new security interests on, assign, transfer, or securities convertible sell any Equity Securities of the Company or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants GSC or other rights to purchase or otherwise acquire for any such Equity Securities of the Company or GSC or (B) split, combine, redeem, recapitalize, reclassify or subdivide any kind Equity Securities of the Company or GSC or make any commitments to acquire do any shares of such capital stock or such convertible or exchangeable securitiesthe foregoing with respect to any Equity Securities;
(diii) materially sell, assign, transfer, license (other than granting non-exclusive licenses to customers (including retailers and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (idistributors) except in the ordinary course of business), sublicense, abandon, allow to lapse or expire, or otherwise dispose of, or fail to enforce, maintain, or protect any material Company Intellectual Property or amended or modified in any material respect any existing Contract or rights with respect to any material Company Intellectual Property;
(iv) (A) merge or consolidate with any other Person, (B) acquire any Equity Securities, business, line of business, other business organization or division thereof, or all or substantially all of the assets, of another Person, in a single transaction or a series of related transactions; (C) make any investment in any other Person or business; (D) enter into any joint venture, partnership or similar venture with any Person (E) restructure, reorganize or adopt a plan or agreement of liquidation, dissolution, merger, consolidation or other reorganization, or (iiF) if consummation dispose of, lease, transfer, surrender, abandon, waive, lapse, or release any asset, right, claim, debt or property, tangible or intangible of the transactions contemplated by this Agreement Company or compliance by GSC which is material to the Company with the provisions of this Agreement will conflict with, business as a whole;
(v) amend or result modify in any violation material respect (excluding payment terms that are modified in the ordinary course of business), cancel, terminate or breach initiate the termination of, or default (with waive or without notice assign any material right, claim or lapse of time or both) benefit under, any Material Contract (excluding any related purchase order in the ordinary course of business) or give rise enter into a Contract which, had it been entered into prior to the Execution Date, would have been a right Material Contract;
(A) accelerate the collection of or discount of accounts receivable, (B) delay the payment of accounts payable or accrued expenses, (C) delay the purchase of supplies or delay capital expenditures, repairs or maintenance, in each case, in a manner that is inconsistent with the Company’s and GSC’s past practice, or (D) take any action or fail to take any action that has or had, or would reasonably be expected to have, the effect of accelerating to the period prior to the Closing, sales to customers or others that would reasonably be expected to occur after the Closing in the ordinary course of business;
(vii) grant or announce any new award of, increase the amount of, or result inaccelerate of the timing of funding, terminationpayment or vesting of, cancellation any cash, equity or acceleration equity-based incentive, severance, change in control, retention, transaction or other bonus, salary, or other compensation or benefit of any current or former employee, officer, director, or other individual service provider of the Company or GSC other than as required by Applicable Law, any existing agreement in effect as of the Execution Date and set forth on Section 5.15(a) of the Disclosure Schedule, or the existing terms of any Company Benefit Plan in effect as of the Execution Date and set forth on Section 5.15(a) of the Disclosure Schedule;
(viii) other than as required by Applicable Law, enter into, establish, adopt, terminate, amend or modify any Company Benefit Plan or any other benefit or compensation plan, policy, program, contract, agreement or arrangement that would be a Company Benefit Plan if in effect as of the Execution Date;
(ix) (A) hire, promote or engage, or otherwise enter into any employment or consulting agreement or arrangement with any individual, or (B) terminate, other than for cause, the employment or service of any current or former employee, officer, director or other service provider;
(A) modify, extend, negotiate, terminate or enter into any collective bargaining agreement or other Contract with any labor organization, union, works council, employee representative body or similar organization or (B) recognize or certify any labor union, labor organization, works council or group of employees as the bargaining representative for any employees of the Company;
(xi) implement or announce any employee layoffs, furloughs, reductions in force, plant closings, reductions in compensation or other similar actions that would trigger notice obligations under the WARN Act;
(xii) waive or release any noncompetition, non-solicitation, nondisclosure or other restrictive covenant obligation of any current or former employee or independent contractor of the Company;
(xiii) (A) make (outside the ordinary course of business), change or rescind any election relating to a loss Taxes; (B) adopt, change or revoke any material method of Tax accounting, except as required by GAAP; (C) settle or compromise any U.S. federal, state or local or non-U.S. Tax liability, claim, dispute or assessment; (D) amend any Tax Return; (E) enter into any closing agreement or similar agreement with any Taxing Authority; (F) waive or consent to an extension of a material benefit understatute of limitations period applicable to any Tax claim, assessment or result deficiency; (G) fail to pay any Tax when due and payable or otherwise incur any penalties or interest in the creation respect of any encumbrance Tax; or (H) surrender any right to claim a material Tax refund or surrender any other Tax asset;
(xiv) except to the extent necessary in connection with the filing of the Preliminary Proxy Statement or the Definitive Proxy Statement, make any material change to the accounting methods, principles or practices of the Company or GSC, except as may be required by this Agreement, GAAP or changes in Applicable Law;
(xv) (A) other than draws on the Company’s current line of credit, issue, create, incur, assume, guarantee, endorse, refinance or otherwise become liable or responsible with respect to (whether directly, contingently or otherwise) any indebtedness for borrowed money, (B) cancel, compromise or modify, in any material respects, the terms of any material indebtedness or (C) make any investments in or upon loans to or enter into or modify any Contract with any Related Party;
(xvi) subject to any Lien or otherwise encumber or permit, allow or suffer to be encumbered, (A) any of the material properties or material assets owned, used or occupied by the Company, other than a Permitted Lien or (B) the Equity Securities of the Company or GSC, other than restrictions imposed on transfer under applicable federal and/or state securities laws or regulations;
(xvii) settle or compromise any pending or threatened Proceeding against the Company or GSC (or for which the Company or GSC would be financially responsible), whether or not commenced prior to the Execution Date, other than settlements of any Company pending or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts threatened Proceeding in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost providing solely for payment of amounts less than $200,000200,000 in cash individually, or $250,000 in the aggregate (net of any amounts covered by insurance); provided, that no settlement of any pending or threatened Proceeding may involve any injunctive or equitable relief, or impose material restrictions on the Company or GSC, or admit wrongdoing, or be with respect to a criminal matter;
(exviii) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur enter into any Lien material to the Company or any of its Subsidiaries on any assets commitment for capital expenditures of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) GSC in excess of $50,000 in the aggregate;
(gxix) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect or arrangement that would purport to the voting of such capital stock;
bind or impose a restrictive covenant on (h) other than as required by Section 5.1(rcustomary confidentiality obligations), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquirematerially limit the operations of, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company Purchaser or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent Affiliates following the consummation of the MergerClosing (including the Company and/or GSC);
(xx) except to a Person that is subject to confidentiality, non-disclosure and non-use obligations in favor of the Company, divulge, furnish to or make accessible, or subject to any obligation to divulge, furnish or make accessible, any Trade Secrets of the Company to any Person;
(xxi) cause or allow any Permit to be cancelled, revoked, terminated, or suspended; or
(sxxii) agree, authorize or commit agree to do take any of the foregoingactions described in clauses (i) through (xxi) above.
Appears in 2 contracts
Sources: Securities Purchase Agreement (Laird Superfood, Inc.), Securities Purchase Agreement (Laird Superfood, Inc.)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after during the period from the date hereof and prior of this Agreement through the earlier of the Closing or the termination of this Agreement, except (1) to the Effective Time (unless extent Parent shall otherwise approve give its prior consent in writingwriting (which consent shall not be unreasonably withheld, conditioned or delayed), (2) and except as set forth in Part 4.1(a) of the Company Disclosure Schedule, (3) as may be required by applicable Laws Legal Requirements, (4) in connection with any COVID-19 Measures or (5) as provided for in expressly required by this Agreement, each of the Company shall, and its shall cause the Company Subsidiaries shall to, use reasonable best efforts to conduct its business in the ordinary course consistent in all material respects with past practice and it shall use reasonable efforts to maintain and preserve intact its business organization and maintain satisfactory relationships with third parties customers, suppliers and keep available distributors and other Persons with whom the services of its present officers and employeesCompany or any Company Subsidiary has material business relations. Without limiting the generality of the foregoing, during the period from the date of this Agreement until through the Effective Timeearlier of the Closing or the termination of this Agreement, except (A1) as to the extent Parent shall otherwise expressly permitted by this Agreement, (B) as Parent may approve give its prior consent in writing (such approval which consent shall not to be unreasonably withheld withheld, conditioned or delayed) or ), (C2) as set forth in Section 6.1 Part 4.1(a) of the Company Disclosure LetterSchedule, (3) as may be required by applicable Legal Requirements or (4) as expressly permitted or required by this Agreement, the Company will shall not (and will shall not permit its Subsidiaries any Company Subsidiary to), in each case by merger, consolidation, division, operation of law, or otherwise:
(ai) adopt amend the Company’s Organizational Documents or propose the Organizational Documents of any change in its articles of incorporation or bylaws or other applicable governing instrumentsCompany Subsidiary;
(bii) merge split, combine, subdivide, change, exchange, amend the terms of or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, reclassify any shares of the Company’s capital stock or other equity interests of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesCompany Subsidiary;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(giii) declare, set aside, make or pay any dividend or other distribution, distribution (whether payable in cash, stock, property stock or otherwise, property) with respect to any shares of its the Company’s capital stock or the capital stock or other equity interest of its Subsidiaries (except for any Company Subsidiary, other than dividends or distributions only to the extent paid by any direct or indirect wholly-wholly owned Company Subsidiary to the Company or to any other direct or indirect wholly-another wholly owned Subsidiary) or enter into any agreement with respect to Subsidiary of the voting of such capital stockCompany;
(hiv) acquire (by merger, consolidation, operation of law, acquisition of stock, other than as required by Section 5.1(r)equity interests or assets, reclassifyformation of a joint venture or otherwise) (A) any other Person, split(B) any equity interest in any other Person, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, (C) any of itsbusiness, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for (D) any shares of such capital stockassets, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under (1) acquisitions by the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) from any wholly owned Subsidiary or among any wholly owned Subsidiaries of the Company Disclosure LetterCompany, incur any indebtedness for borrowed money or guarantee such indebtedness (2) the purchase of another Personequipment, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiariesservices, except for indebtedness for borrowed money incurred supplies and inventory in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregatepractice, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv3) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 inbound licenses of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory Intellectual Property in the ordinary course of businessbusiness consistent with past practice;
(v) except in connection with any transaction between the Company and any wholly owned Subsidiary of the Company or among any wholly owned Subsidiaries of the Company, sales issue, sell, grant or otherwise permit to become outstanding any additional shares of, or securities convertible or exchangeable for, or options, warrants or rights to acquire, any shares of obsolete assets and sales, leases, licenses its capital stock or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregateequity interests, other than pursuant shares of Company Common Stock issuable upon exercise of Company Options or the vesting of Company RSUs, in each case, to Contracts in effect prior to the extent such Company Options or Company RSUs are outstanding as of the date of this AgreementAgreement and such exercise or settlement is in accordance with the terms thereof;
(ovi) except as required pursuant expressly contemplated by this Agreement, take any action to accelerate the vesting of any Assumed Company Option or any Assumed Company RSU Award (other than to implement any existing written, binding agreements or policies arrangement for such acceleration in effect prior to as of the date of this Agreement and set forth in Section 5.1(h) of on the Company Disclosure Letter, or as otherwise required by applicable Law, Schedule);
(ivii) grant or provide except in connection with any severance or termination payments or benefits to transaction between the Company and any director, officer or employee wholly owned Subsidiary of the Company or among any wholly owned Subsidiaries of its Subsidiariesthe Company, (ii) increase the compensationsell, bonus assign, transfer, lease or pension, welfare, severance or other benefits of, pay license to any bonus tothird party, or make encumber, or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), any new equity awards to any directorCompany IP, officer Material Communications Permit, or employee right conferred thereby, or material assets of the Company (including any Company Owned Real Property), other than: (A) sales of inventory, goods or any of its Subsidiaries, except, in the case of employees who are not officers, services in the ordinary course of business consistent with past practice or of obsolete equipment or assets in the ordinary course of business consistent with past practice; (B) pursuant to written Contracts or commitments existing as of the date of this Agreement and set forth in Part 4.1(a)(vii) of the Company Disclosure Schedule; (C) non-exclusive licenses granted to customers or other third parties in the ordinary course of business consistent with past practice or (D) dispositions of assets which do not constitute Company IP, and with respect to which the fair market value of all such assets does not exceed $500,000 in the aggregate;
(viii) directly or indirectly repurchase, redeem or otherwise acquire any shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, or any other securities or obligations convertible (currently or after the passage of time or the occurrence of certain events) into or exchangeable for any shares of the Company’s or any Company Subsidiary’s capital stock or equity interests, except: (A) shares of Company Common Stock repurchased from employees or consultants or former employees or consultants of the Company pursuant to the exercise of repurchase rights existing prior to the date of this Agreement; or (B) shares of Company Common Stock accepted as payment for the exercise price of options to purchase Company Common Stock pursuant to the Company Equity Plans or for withholding Taxes incurred in connection with the exercise, vesting or settlement of Company Options and Company RSUs, as applicable, in accordance with the terms of the applicable award;
(ix) incur any indebtedness for borrowed money, guarantee any such indebtedness, issue or sell any debt securities or rights to acquire any debt securities (directly, contingently or otherwise) or make any loans or advances or capital contributions to any other Person, except for: (1) repayment of indebtedness and reborrowings of such repaid amounts under the Existing Company Credit Facility in accordance with the terms thereof; (2) letters of credit, bank guarantees, security or performance bonds or similar credit support instruments at any time, not to exceed $2,000,000 in the ordinary course of business consistent with past practice; (3) advancement obligations under the Organizational Documents of the Company or the Company Subsidiaries or indemnification agreements with the Company or the Company Subsidiaries and (4) any indebtedness among the Company and its wholly owned Subsidiaries or among any wholly owned Subsidiaries of the Company (and guarantees by the Company or its Subsidiaries in respect thereof);
(x) (A) adopt, terminate or amend any Company Plan, (iiiB) establishincrease, adoptor accelerate the vesting or payment of, the compensation or benefits of any director, independent contractor or current or former employee of the Company or any Company Subsidiary, (C) grant any rights to severance, retention, change in control or termination pay to any current or former director, independent contractor or current or former employee of the Company or any Company Subsidiary, (D) hire or promote any employee above the level of Vice President or whose annual base compensation exceeds $250,000, or (E) terminate the employment of any employee of the Company or any Company Subsidiary above the level of Vice President (other than for cause); except, in each case, for: (1) amendments to Company Plans determined by the Company in good faith to be required to comply with applicable Legal Requirements; (2) as permitted by the terms of the Company Plans in effect on the date of this Agreement or as otherwise expressly contemplated by this Agreement; (3) hiring or promotion of employees below the level of Vice President and whose annual base compensation does not or will not (after giving effect to any such promotion) exceed $250,000; and (4) the grant of annual equity awards and payment of cash incentive compensation as contemplated by Part 4.1(a)(x) of the Company Disclosure Schedule;
(xi) except for renewals or extensions of any existing Material Contract entered into in the ordinary course of business consistent with past practice, (i)(A) materially amend or terminate (except for terminations pursuant to the expiration of the existing term of any Material Contract) any Material Contract or (B) waive, release or assign any material rights under any Material Contracts, or (ii) enter into any Contract or agreement that, if in effect on the date of this Agreement, would constitute a Material Contract (other than Contracts entered into with Top Customers or Top Suppliers in the ordinary course of business consistent with past practice);
(xii) change any of its methods of financial accounting or accounting practices in any material respect other than as required by changes in GAAP;
(xiii) change or revoke any material Tax election, change or adopt any Tax accounting period or material method of Tax accounting, amend any material Company Return if such amendment would reasonably be expected to result in a material Tax liability, file any material Tax Return prepared in a manner materially inconsistent with past practice, settle or compromise any material liability for Taxes or any Tax audit, claim, or other proceeding relating to a material amount of Taxes, enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar state, local or non-U.S. Legal Requirement) if such agreement would reasonably be expected to result in a material Tax liability or have a material impact on Taxes, request any Tax ruling from any Governmental Entity, surrender any right to claim a material refund of Taxes, or, other than in the ordinary course of business consistent with past practice, agree to an extension or waiver of the statute of limitations with respect to a material amount of Taxes;
(xiv) sell, transfer, assign, license, or otherwise dispose of (by merger, consolidation, operation of law, division or otherwise), or mortgage, encumber or exchange any material Intellectual Property owned, or purported to be owned, by the Company or any Subsidiary of the Company, including, for the avoidance of doubt, any sale, transfer, assignment, license, or other disposition of, or mortgage, encumbrance or exchange of any such material Intellectual Property to or with any Affiliate of the Company (other than non-exclusive licenses granted in the ordinary course of business), or modify, amend, cancel, terminate, waive, release or assign any Company IP License or any rights, claims, obligations or benefits thereunder or enter into any Contract that would have been a Company IP License had it been entered into prior to the Effective Time, in each case, with respect to any nonmaterial Company IP License, except in the ordinary course of business;
(xv) make aggregate capital expenditures in excess of one hundred ten percent (110%) of the amounts contemplated by the annual capital expenditure budget set forth in Part 4.1(a)(xv) of the Company Disclosure Schedule;
(xvi) except as expressly required by applicable Legal Requirements or the Company’s Organizational Documents, convene (A) any special meeting of the Company’s stockholders other than the Company Stockholder Meeting or (B) any other meeting of the Company’s stockholders to consider a proposal that would reasonably be expected to impair, prevent or delay the consummation of the transactions contemplated hereby; provided, that nothing in this clause (xvi) shall prevent the Company from holding its annual meeting of stockholders for the election of directors and such other matters that shall be required to be brought before any such meeting under any applicable law, rule or regulation or that shall be brought before any such meeting by a stockholder of the Company who complies with the requirements of Section 1.3 of the bylaws of the Company;
(xvii) enter into any agreement, understanding or arrangement with respect to the voting of any capital stock or other equity interests of the Company (including any voting trust), other than with respect to awards under the Company Equity Plans otherwise permitted under this Agreement or in connection with the granting of revocable proxies in connection with any meeting of the Company’s stockholders;
(xviii) adopt a plan of (A) complete or partial liquidation of the Company or any Subsidiary of the Company or (B) dissolution, merger, consolidation, division, restructuring, recapitalization or other reorganization;
(xix) commence, settle or compromise any litigation, claim, suit, action or proceeding, except for settlements or compromises that (A) involve solely monetary remedies with a value not in excess of $500,000 in the aggregate to be paid by the Company and its Subsidiaries, (B) do not impose any restriction on the Company’s business or the business of the Company Subsidiaries, (C) do not relate to any litigation, claim, suit, action or proceeding by the Company’s stockholders in connection with this Agreement or the Merger and (D) do not include an admission of liability or fault on the part of the Company or any Company Subsidiary;
(xx) materially reduce the amount of insurance coverage or fail to renew or maintain any material existing insurance policies;
(xxi) amend or terminate any Benefit Plan or amend Company Permits in a manner that adversely impacts the terms of any outstanding equity-based awards, (iv) take any action Company’s ability to accelerate the vesting or payment, or fund or conduct its business in any material respect;
(xxii) (A) fail to pay any issuance, renewal, maintenance and other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations payments that become due with respect to any Benefit Plan material Company Registered IP or otherwise abandon, cancel, or permit to change lapse any material Company Registered IP, other than in its reasonable business judgment or in the manner ordinary course of business consistent with past practice, or (B) authorize the disclosure to any third party of any material Trade Secret included in which contributions the Company IP in a way that results in loss of trade secret protection, other than in the ordinary course of business consistent with past practice; or
(xxiii) authorize, approve or enter into any agreement or make any commitment to such plans are made take any of the actions described in clauses “(i)” through “(xxii)” of this sentence.
(b) Parent agrees that, during the period from the date of this Agreement through the earlier of the Closing or the basis on which such contributions are determinedtermination of this Agreement, except (1) to the extent the Company shall otherwise give its prior consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), (2) as set forth in Part 4.1(b) the Parent Disclosure Schedule, (3) as may be required by GAAP; applicable Legal Requirements, (4) in connection with any COVID-19 Measures or (vi5) forgive any loans as expressly required by this Agreement, Parent shall, and shall cause the Parent Subsidiaries to, use reasonable best efforts to directorsconduct its business in the ordinary course consistent in all material respects with past practice and to maintain and preserve intact its business organization. Without limiting the foregoing, officers or employees during the period from the date of this Agreement through the earlier of the Company Closing or any the termination of its Subsidiaries;
this Agreement, except (p1) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger extent the Company shall otherwise give its prior consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed), (2) as set forth in Article VII Part 4.1(b) of the Parent Disclosure Schedule, (3) as may be required by applicable Legal Requirements or (4) as expressly permitted or required by this Agreement, Parent and Acquisition Sub shall not being satisfied;(and shall not permit any Parent Subsidiary to), in each case by merger, consolidation, division, operation of law, or otherwise:
(qi) take amend Parent’s or Acquisition Sub’s Organizational Documents or amend the Organizational Documents of any action Parent Subsidiary in any manner that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoing.be adv
Appears in 2 contracts
Sources: Merger Agreement (RigNet, Inc.), Merger Agreement (Viasat Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after that from the date hereof and prior to of this Agreement until the Effective Time (Time, unless Parent shall otherwise approve in writing) writing (such approval not to be unreasonably withheld or delayed), and except as otherwise expressly contemplated by this Agreement or as required by applicable Laws Law or Contracts existing as provided for in of the date of this Agreement, each the business of the Company and its Subsidiaries shall conduct its business be conducted only in the ordinary and usual course and, to the extent consistent with past practice therewith, the Company and it its Subsidiaries shall use reasonable efforts best efforts, when in the best interests of the Company and its Subsidiaries, to preserve their business organizations intact its business organization and relationships maintain their existing relations and goodwill with third parties Governmental Entities with jurisdiction over health-care related matters, customers, manufacturers (which shall not include the payment of additional money or concessions other than pursuant to existing contractual terms), suppliers, distributors, creditors, lessors and employees and keep available the services of the present employees and agents of the Company and its present officers and employeesSubsidiaries. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (Ai) as otherwise expressly permitted contemplated by this Agreement or as required by Contracts existing as of the date of this Agreement, (Bii) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (Ciii) as set forth in Section 6.1 6.1(a) of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(ai) adopt or propose any change in its articles certificate of incorporation or bylaws by laws or other applicable governing instrumentsinstruments or amend any term of the Shares, other than in furtherance of this Agreement;
(bii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly owned Subsidiaries of the Company that are not obligors or restructureguarantors of third-party indebtedness, reorganize or completely adopt a plan of liquidation;
(iii) except as set forth in Section 6.1(a)(xi), acquire assets outside of the ordinary course of business from any other Person with an aggregate value or partially liquidate or otherwise purchase price in excess of $750,000, other than capital expenditures within the Company’s capital expenditure budget as set forth in Section 6.1(a)(xi) of the Company Disclosure Letter;
(iv) enter into any agreements or arrangements imposing material changes or restrictions on line of business other than the line of business in which the Company and its assetsSubsidiaries is currently engaged as of the date of this Agreement or, operations or businessesexcept for the products set forth in Section 6.1(a)(iv) of the Company Disclosure Letter, distribute products other than the products that the Company and its Subsidiaries are currently distributing as of the date of this Agreement;
(cv) other than in accordance with benefits outstanding the issuance of Shares (i) pursuant to the ESPP as contemplated by Section 4.5 or (ii) pursuant to Company Options granted prior to the date hereof under the Company Stock Plansof this Agreement or as contemplated by Section 6.1(a)(xix), issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its SubsidiariesSubsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesRights;
(dvi) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except other than in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien (other than Permitted Liens) material to the Company or any of its Subsidiaries on any assets used in the businesses of the Company or any of its Subsidiaries having a value in excess of $50,000500,000;
(fvii) make any loans, advances or capital contributions to to, or investments in in, any Person (other than the Company or any direct or indirect wholly-wholly owned Subsidiary of the Company) in excess of $50,000 500,000 in the aggregate;
(gviii) declare, set aside, make aside or pay any dividend or other distribution, payable distribution (whether in cash, stock, stock or property or otherwise, any combination thereof) with respect to any shares of its capital stock or the capital stock of its Subsidiaries (any Subsidiary, except for dividends paid or distributions by any direct or indirect wholly-wholly owned Subsidiary to Subsidiaries of the Company and pro rata dividends or distributions payable to any other direct or indirect whollyholders of interests in non-wholly owned Subsidiary) or enter into any agreement with respect to the voting of such capital stockSubsidiaries;
(hix) other than as required by Section 5.1(rreclassify, split (including a reverse split), reclassify, split, combinerecapitalize, subdivide or redeemrepurchase, purchase redeem or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock PlansRights;
(ix) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred (A) in the ordinary course of business consistent with past practices (i) not to exceed $200,000 500,000 in the aggregate, (ii) in replacement of existing aggregate or indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replacedincurred under existing credit facilities, (iiiB) refinancings on commercially reasonable terms or (C) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-wholly owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 guarantees by Subsidiaries of notional debt in indebtedness of the aggregateCompany;
(jxi) except as set forth in the capital budgets set forth in Section 6.1(j6.1(a)(xi) of the Company Disclosure Letter and consistent therewithLetter, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period750,000;
(kxii) other than in the ordinary course of business, enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement (other than as permitted elsewhere in this Section 6.1(a));
(xiii) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP or except as the Company, based upon the advice of its independent auditors after consultation with Parent, determines in good faith is advisable to comply with, or conform to comply with changes in, GAAPbest accounting practices;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(oxiv) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h6.1(a)(xiv) of the Company Disclosure Letter, provide an indemnity in respect of any pending or as otherwise required threatened civil, criminal or administrative actions, suits, claims, litigations, arbitrations, investigations or other proceedings for an amount to be paid by applicable Lawthe Company or any of its Subsidiaries in excess of, (i) grant or provide that would reasonably be expected to be in excess of, $250,000 or which would be reasonably likely to have any severance or termination payments or benefits to any director, officer or employee adverse impact on the operations of the Company or any of its Subsidiaries, or indemnify any Person other than pursuant to a contractual obligation to do so;
(iixv) increase the compensationenter into any consent decree, bonus enter a guilty or pensionnolo contendre plea, welfaresettle any civil, severance criminal or administration actions, suits, claims, litigations, arbitrations, investigations or other benefits of, pay proceedings for an amount in excess of $1,000,000 or enter into any bonus to, or make settlement that would reasonably be expected to change in any new equity awards to any director, officer or employee of material respect the Company Company’s or any of its Subsidiaries, except, ’ current methods of operations;
(xvi) other than in the ordinary course of business, (A) amend or modify in any material respect, or terminate or waive any material right or benefit under, any Material Contract (other than as permitted elsewhere in this Section 6.1(a)) or (B) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of employees who are not officers$500,000;
(xvii) except as required by Law, make any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement or adopt any method therefor that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods or settle or compromise any material tax liability;
(xviii) sell, lease, license or otherwise dispose of any material assets of the Company or its Subsidiaries except in the ordinary course of business consistent with past practice or obsolete assets;
(xix) terminate, (iii) establish, adopt, enter into, make any new grants or awards under, amend or terminate otherwise modify any Company Benefit Plan or amend the terms of any outstanding equity-based awardsPlans, (iv) take any action except new hire grants committed to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, writing prior to the extent not already provided date of this Agreement in any such Benefit Planthe ordinary and usual course of business; or
(xx) increase the salary, (v) change any actuarial wage, bonus or other assumptions used to calculate funding obligations with respect to any Benefit Plan compensation payable or to change become payable to the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries, except in the ordinary and usual course of business; or
(xxi) agree or commit to do any of the foregoing. Notwithstanding anything to the contrary contained in this Section 6.1(a), to the extent they relate to the Partnerships, the Company’s obligations in this Section 6.1(a) shall be limited to taking such steps, such as the exercise of any veto rights, that are within the control of the Company and its Subsidiaries (other than the Partnerships).
(b) From the date of this Agreement until the Effective Time, except (i) as otherwise expressly required by this Agreement or other Contract existing on the date of this Agreement, (ii) as the Company may approve in writing (such approval not to be unreasonably withheld or delayed) or (iii) as set forth in Section 6.1(b) of the Parent Disclosure Letter, Parent will not, and will not permit its Subsidiaries to:
(i) adopt or propose any material change in Parent’s certificate of incorporation or by laws or amend any term of the shares of Parent Common Stock;
(pii) take enter into any action agreement with respect to, or omit consummate, any acquisition by Parent or its Subsidiaries of any Person or assets, the consummation of which would require the filing of a current report on Form 8-K pursuant to take any action that is Item 2.01 thereof with the SEC and which would reasonably likely be expected to result in any of materially hinder or delay the conditions to the Merger set forth in Article VII not being satisfiedtransactions contemplated by this Agreement;
(qiii) take other than the issuance of shares of Parent Common Stock issued for fair value in arm’s length transactions and other than the issuance of shares in the ordinary course of business consistent with past practices pursuant to Parent employee benefit plans, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any action shares of capital stock of Parent or any its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of Parent to Parent or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or rights of any kind that would violate the CIA;
(r) knowingly take obligate Parent or permit any of its Subsidiaries to take issue or sell any action that is reasonably likely shares of such capital stock or such convertible or exchangeable securities;
(iv) declare, set aside or pay any dividend or distribution (whether in cash, stock or property or any combination thereof) on any shares of Parent Common Stock or on any shares of capital stock of any Subsidiary, other than (A) by wholly owned Subsidiaries and pro rata dividends or distributions payable to prevent the consummation holders of the Mergerinterests in non-wholly owned Subsidiaries and (B) Parent’s regular quarterly dividend, including any increases thereof, at record and payment dates consistent with past practices;
(v) reclassify, split (including a reverse split), recapitalize, subdivide or repurchase, redeem or otherwise acquire at prices above fair market value, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock; or
(svi) agree, authorize agree or commit to do any of the foregoing.
Appears in 2 contracts
Sources: Merger Agreement (Accredo Health Inc), Merger Agreement (Medco Health Solutions Inc)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after Between the date hereof of this Agreement and prior to the Effective Time (Closing Date or the earlier termination of this Agreement, except as set forth on Schedule 7.1 or as contemplated by this Agreement, unless Parent shall otherwise approve Buyer has previously consented in writing) and except writing or as required by applicable Laws or as provided for in this AgreementLaw, each of the Company Acquired Companies will, and its Subsidiaries shall TAT and Sellers will cause the Acquired Companies to, (i) conduct its business their operations in the ordinary course of business consistent with past practice, (ii) use commercially reasonable efforts to preserve (A) present business operations, organization (including employees, but specifically excluding officers and directors) and goodwill and (B) present relationships with suppliers and customers having business dealings with the Acquired Companies and (iii) maintain all assets and properties of, or used by, the Acquired Companies in their current condition (ordinary wear and tear excepted). Without limiting the foregoing, between the date of this Agreement and the Closing Date or the earlier termination of this Agreement, except as set forth on Schedule 7.1 or as contemplated by this Agreement, unless Buyer has previously consented in writing, N. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 3rd or ▇▇▇▇▇▇ ▇▇▇▇▇ has previously directed (within their existing authority) or requested, in each case in writing, or as required by applicable Law, no Acquired Company shall, nor shall TAT or Sellers permit any Acquired Company to, do any of the following:
(a) incur any indebtedness for borrowed money or issue any long-term debt securities or assume, guarantee or endorse such obligations of any other Person, except for indebtedness incurred in the ordinary course of business under lines of credit existing on the date hereof;
(b) except in the ordinary course of business, (i) acquire any material property or assets, (ii) mortgage or encumber any material property or assets other than Permitted Liens, or (iii) cancel any debts owed to or claims held by the Acquired Companies;
(c) other than in the ordinary course of business, enter into, amend, modify or terminate any Material Contract;
(d) (i) enter into, adopt, amend or terminate any agreement relating to the compensation, bonus, benefits provided to or severance of any employee of, or any employee to be transferred at Closing to, any Acquired Company or (ii) terminate without cause the employment of any employee of, or any employee to be transferred at Closing to, any Acquired Company, in each case other than in the ordinary course of business, except to the extent required by Law or any existing agreements;
(e) make any material change to the Acquired Companies’ accounting (including Tax accounting) methods, principles or practices, except as may be required by GAAP or changes in Law;
(f) make any amendment to any Acquired Company’s Organizational Documents;
(g) issue or sell any capital stock or options, other equity securities, warrants, calls, subscriptions or other rights to purchase any capital stock or other equity securities of any Acquired Company of any of its Subsidiaries or split, combine or subdivide the capital stock or other equity securities of an Acquired Company or any of its Subsidiaries;
(h) (i) make, change or revoke any material Tax election, settle or compromise any material Tax claim or liability or enter into a settlement or compromise, or change (or make a request to any taxing authority to change) any material aspect of its method of accounting for Tax purposes, in each case with respect an Acquired Company, (ii) enter into any material closing agreement, or consent to any extension or waiver of the statutory period of limitations applicable to any claim or assessment in respect of Taxes or (iii) prepare or file any Tax Return related an Acquired Company (or any amendment thereof) unless such Tax Return shall have been prepared in a manner consistent with past practice and it Sellers shall use reasonable efforts have provided Buyer a copy thereof (together with supporting papers) at least ten Business days prior to preserve intact its business organization the due date thereof for Buyer to review and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments);
(bi) merge or consolidate the Company or take any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) action which would materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on affect the date hereof, (i) except in ability of the ordinary course of business, or (ii) if consummation of parties to consummate the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default Agreement; or
(with or without notice or lapse of time or bothj) under, or give rise agree to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon take any of the properties actions described in sub-clauses (a) through (i) above. Nothing contained in this Section 7.1 or assets of elsewhere in this Agreement shall preclude any Company or Parent or any of its Subsidiaries under such Contract; providedAcquired Company, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business Acquired Company’s sole discretion, from making distributions to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(eits equity holder(s) except pursuant to Contracts in effect prior to the date Effective Date, and from and after the Effective Date, no Acquired Company shall make any distributions of this Agreement, create cash or incur any Lien material other assets to its equity holder(s) but shall not be prohibited from making cash management transfers related to expenses of the Company Acquired Companies paid directly by TAT or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred Seller in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoingpractices.
Appears in 2 contracts
Sources: Stock Purchase Agreement (Transatlantic Petroleum Ltd.), Stock Purchase Agreement (Transatlantic Petroleum Ltd.)
Interim Operations. The (a) Each of the Company and EFIH covenants and agrees as to itself and each of its Subsidiaries (other than the Oncor Entities, subject to Section 6.23), and any entities that are to be, and actually are, contributed to Reorganized TCEH pursuant to the Plan of Reorganization) that, except (i) as otherwise specifically permitted by the provisions of this Agreement, (ii) as Parent may approve in writing (such approval, not to be unreasonably withheld, delayed or conditioned), (iii) as is required by any applicable Law or any Order (as defined below) of any Governmental Entity, (iv) as set forth in Section 6.1(a) of the Company Disclosure Letter, (v) as required by the Bankruptcy Court or the Bankruptcy Code, and (vi) as required pursuant to the Plan of Reorganization, in each case after the date hereof and prior to the Effective Time earlier of the Termination Date (unless Parent shall otherwise approve in writingas defined below) and except as required by applicable Laws or as provided for in this Agreementthe First Closing Date, each (w) the businesses of the Company Company, EFIH and its their respective Subsidiaries (other than the Oncor Entities, subject to Section 6.23) shall conduct its business be conducted in the ordinary course consistent of business in all material respects and in accordance with past practice the Bankruptcy Code and it the Orders of the Bankruptcy Court and (x) each of the Company, EFIH and their respective Subsidiaries (other than the Oncor Entities, subject to Section 6.23) shall use its reasonable best efforts to preserve intact its business organization and relationships with third parties employees, customers, suppliers and keep available the services of its present officers and employeesGovernmental Entities. Without limiting the generality of the foregoingpreceding provisions of this Section 6.1(a), and in furtherance thereof, from the date of this Agreement until the Effective Timeearlier of the Termination Date and the First Closing Date, except (A) as otherwise expressly specifically permitted by the provisions of this Agreement, (B) as Parent may approve in writing (such approval approval, not to be unreasonably withheld withheld, delayed or delayed) or conditioned), (C) as is required by any applicable Law or any Order of any Governmental Entity, (D) as set forth in Section 6.1 6.1(a) of the Company Disclosure Letter, (E) as required by the Bankruptcy Court or the Bankruptcy Code, or (F) as required pursuant to the Plan of Reorganization, each of the Company and EFIH will not and will not permit any of its respective Subsidiaries (other than the Oncor Entities, subject to Section 6.23, and any entities that are to be, and actually are, contributed to Reorganized TCEH pursuant to the Plan of Reorganization) to:
(ai) adopt or propose any change in its articles certificate of incorporation formation or bylaws or other applicable governing instruments;
(bii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(ciii) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization other than in accordance with benefits outstanding prior pursuant to the date hereof Plan of Reorganization;
(iv) make any acquisition of any assets or Person for a purchase price in excess of $1,000,000, in the aggregate, unless such acquisition would be permissible under the Company Stock Plans, Section 6.1(a)(xi) below;
(v) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of its capital stock or other equity interests (other than (A) the issuance of shares of Common Stock upon the settlement of awards outstanding as of the date hereof under the Company Stock Plan (and dividend equivalents thereon, if applicable), or (B) the issuance of equity interests by a wholly owned Subsidiary of the Company to the Company or any its Subsidiariesanother wholly owned Subsidiary of the Company), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or other equity interests or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(fvi) make any loans, advances or capital contributions to or investments in any Person in excess of $1,000,000, in the aggregate (other than loans, advances or capital contributions to or investments in the Company or any direct or indirect wholly-wholly owned Subsidiary of the Company) in excess of $50,000 in the aggregate);
(gvii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries other equity interest (except for dividends paid by any direct or indirect wholly-wholly owned Subsidiary to the Company or to any other direct or indirect wholly-wholly owned SubsidiarySubsidiary of the Company) or enter into any agreement with respect to the voting of such its capital stock;
(hviii) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire or offer to repurchase, redeem or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or equity interests or securities convertible or exchangeable into or exercisable for any shares of its capital stock or other equity interests, or any options, warrants or other rights of any kind to acquire any such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plansstock or other equity interests or such convertible or exchangeable securities;
(iix) except under credit facilities set forth in Section 5.1(j)(i)(D) of repurchase, redeem, defease, cancel, prepay, forgive, issue, sell, incur, or announce, offer, place, or arrange for the Company Disclosure Letterincurrence of, incur or otherwise acquire any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security securities, of the Company or any of its Subsidiaries, or assume, guarantee or otherwise become responsible for such indebtedness of another Person (other than a wholly owned Subsidiary of the Company), except for indebtedness for borrowed money (A) incurred or repaid under the EFIH First Lien DIP (1) in the ordinary course of business consistent or (2) in connection with past practices the refinancing thereof or (iB) not to exceed $200,000 incurred by drawing under outstanding letters of credit in the aggregate, (ii) in replacement ordinary course of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregatebusiness;
(jx) except as set forth (A) grant to any Employee any increase in compensation or benefits other than increases in the capital budgets set forth ordinary course of business, (B) grant to any Employee any increase in Section 6.1(jchange in control, severance or termination pay, (C) establish, adopt, enter into, amend in any material respect or terminate any Assumed Plan (or any plan or agreement that would be a Benefit Plan if in existence on the date hereof) in the case of a Contributed Plan, other than in the ordinary course of business, (D) take any action to accelerate the time of vesting, funding or payment of any compensation or benefits under any Assumed Plan, (E) grant any new awards, or any outstanding awards, under any Assumed Plan, or (F) enter into or amend any collective bargaining agreement or other agreement with a labor union, works council or similar organization, except in the case of the Company Disclosure Letter foregoing clauses (A) through (F) for actions required pursuant to the terms of any Benefit Plan, or in accordance with the terms and consistent therewith, conditions of this Agreement or applicable Law;
(xi) make or authorize any capital expenditure in an amount in excess of $200,000 1,000,000, in the aggregate aggregate, during any 12 12-month period;
(kxii) make any material changes with respect to its financial accounting policies methods, principles, policies, practices or procedures, except as required to comply with, by Law or to comply with by changes in, in GAAP;
(lxiii) settle any litigation other than with respect to (1) audits or other Tax proceedings before a Governmental Entity disclosed in Section 6.1(a)(xiii) of the Company Disclosure Letter or (2) any action to accelerate the recognition of cancellation of indebtedness income that previously has been deferred pursuant to Section 108(i) of the Code, in each case, only and to the extent the foregoing would not materially adversely affect Parent, make (excluding any elections made (a) in the ordinary course of business or (b) under Section 168(k) of the Code) or change any material Tax election, change any material method of Tax accounting, settle or compromise any material Tax liability, claim or assessment or agree to an extension or waiver of the limitation period to any material Tax claim or assessment, grant any power of attorney with respect to material Taxes, enter into any closing agreement with respect to any material Tax or refund or amend any material Tax Return, in each case, other than as required by Law;
(xiv) waive, release, assign, settle or compromise any pending or threatened claim, action, suit or proceeding against the Company or any of its Subsidiaries (A) for an amount in excess of $200,000 10,000,000, or (B) that entails the acceptance or imposition of any obligation material restrictions on the business or liability operations of the Company in excess of such amountor its Subsidiaries;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(nxv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, Subsidiaries (including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets ) with a fair market value not in excess of $250,000 1,000,000, in the aggregate, other than pursuant to Contracts in effect prior to sales of obsolete goods or equipment or the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements licensing or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits sublicensing of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, Intellectual Property in the ordinary course of business consistent with past practice or pursuant to Contracts in effect prior to the date hereof that have been made available to the Purchasers;
(xvi) other than pursuant to the Plan of Reorganization, (iiiA) establishenter into, adoptterminate (other than at the end of a term), amend renew or terminate any Benefit Plan materially extend or amend any Company Material Contract or Contract that, if in effect on the terms of any outstanding equity-based awardsdate hereof, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may would be required by GAAPa Company Material Contract; or (viB) forgive waive any loans to directorsmaterial default under, officers or employees of release, settle or compromise any material claim against the Company or any of its Subsidiaries;
(p) take any action Subsidiaries or omit to take any action that is reasonably likely to result in any of the conditions liability or obligation owing to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take Company or permit any of its Subsidiaries under any Company Material Contract;
(xvii) enter into any Contract that contains a change of control or similar provision that would require a payment to take any action that is reasonably likely to prevent Person counterparty thereto in connection with the consummation of the MergerTransactions that would not otherwise be due;
(xviii) fail to maintain in full force and effect material insurance policies covering the Company and its Subsidiaries and their respective properties, assets and businesses in a form and amount consistent with past practice unless the Company determines, in its reasonable commercial judgment, that the form or amount of such insurance should be modified; or
(sxix) agree, authorize or commit to do any of the foregoing.
(b) Notwithstanding anything in Section 6.1(a) to the contrary, in order to prevent the occurrence of, or mitigate the existence of, an emergency situation involving endangerment of life, human health, safety, the Environment or material property, equipment or other assets, the Company and EFIH may take commercially reasonable actions that would otherwise be prohibited pursuant to Section 6.1(a); provided, however, that the Company and EFIH shall provide Parent with notice of such emergency situation as soon as reasonably practicable after obtaining Knowledge thereof.
(c) Except (i) for actions required under the terms of this Agreement, (ii) for actions expressly permitted under Section 6.2 or (iii) as required by the Bankruptcy Court or the Bankruptcy Code, no party hereto shall intentionally take or permit any of its controlled Affiliates to take any action that is reasonably likely to prevent in any material respect the consummation of any of the Transactions.
(d) Nothing contained in this Agreement is intended to give either Purchaser, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time.
Appears in 2 contracts
Sources: Purchase Agreement (Ovation Acquisition I, L.L.C.), Purchase Agreement (Energy Future Competitive Holdings Co LLC)
Interim Operations. The Company covenants and agrees (a) Except as to itself and its Subsidiaries thatotherwise (i) expressly permitted or required by this Agreement, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writingii) and except as required by applicable Laws Law, (iii) expressly approved in writing by Parent (such approval not to be unreasonably withheld, delayed or as provided for conditioned) or (iv) expressly set forth in this Agreement, each Section 6.1(a) of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoingDisclosure Schedule, from the date of this Agreement until the Effective Time, the Company will, and will cause its Subsidiaries to conduct their businesses in the ordinary course of business consistent with past practice and use its and their reasonable best efforts to maintain and preserve intact the material aspects of their business organizations, to maintain their business relationships and goodwill with suppliers, contractors, distributors, customers, partners, employees, licensors, licensees and others having material business relationships with it, to retain the services of the Company’s and its Subsidiaries’ employees and business associates and agents and to comply in all material respects with all applicable Laws and the requirements of all Material Contracts.
(b) Without limiting the generality of the foregoing, except (A) as otherwise expressly (x) permitted or required by this Agreement, (By) as Parent may approve approved in writing by Parent (such approval not to be unreasonably withheld withheld, delayed or delayedconditioned) or (Cz) as set forth in Section 6.1 6.1(b) of the Company Disclosure LetterSchedule, from the date of this Agreement until the Effective Time, the Company will not not, and will not permit cause its Subsidiaries not to:
(ai) (x) adopt or propose any change in its articles of incorporation the Charter or bylaws of the Company or other applicable governing instruments(y) adopt any change in the comparable organizational document of any Subsidiary of the Company;
(bii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transaction between or among any of its Subsidiaries that would not impose, individually or in the aggregate, any changes or restrictions on its assets, operations or business or on the assets, operations and business of the Company and its Subsidiaries taken as a whole that would be adverse to Parent or any of its Affiliates, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements agreement or arrangements imposing material arrangement imposing, individually or in the aggregate, any changes or restrictions on its the assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, business or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereofassets, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of operations and business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess that would be adverse to Parent or any of $50,000its Affiliates;
(fiii) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any material assets, securities, properties, rights, interests or businesses (other than purchases of supplies, equipment, managed services, cloud services, software or inventory in the ordinary course of business consistent with past practice);
(iv) sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire, transfer or dispose of, or create or incur any Lien (other than Permitted Liens) on, any of the Company’s or its Subsidiaries’ material assets (including Intellectual Property Rights), securities, properties, rights, interests or businesses (including pursuant to any sale-leaseback transaction or asset securitization transaction but excluding any sale, disposition, lease or license of inventory or product in the ordinary course of business consistent with past practice);
(v) purchase, redeem or otherwise acquire, or authorize or agree to purchase, redeem or acquire, any Group Securities (other than Group Securities of wholly owned Subsidiaries of the Company and other than the acceptance of Shares as payment for the exercise price of Company Options (including pursuant to a net exercise feature) or for withholding taxes incurred in connection with the exercise of Company Options or the vesting or net settlement of other Group Securities outstanding under the Stock Plans (and dividend equivalents thereon, if any), in each case to the extent such Group Securities for withholding taxes that are outstanding as of the date of this Agreement and in accordance with their applicable terms on the date of this Agreement);
(vi) except (A) for Shares issuable upon the exercise or conversion of Company Options or Company RSUs outstanding on the date hereof; or (B) with respect to Parent’s and Merger Sub’s participation in the transactions contemplated by this Agreement, issue, sell, grant, dispose of, pledge, deliver, transfer or otherwise encumber or authorize, propose or agree to the issuance, sale, grant, disposition, pledge, delivery, transfer or encumbrance by the Company or any of its Subsidiaries of, any Group Securities;
(vii) make any loans, advances or capital contributions to to, or investments in in, any Person (other than the Company or any direct or indirect of its wholly-owned Subsidiary Subsidiaries), whether or not in the ordinary course of the Company) business consistent with past practice, in excess of an amount greater than $50,000 500,000 individually or $2,000,000 in the aggregate;
(gviii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any Group Securities or consent to any dividend or distribution of its capital stock or the capital stock of its Subsidiaries each Joint Venture Entity (except for dividends or other distributions paid by any direct or indirect wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly-owned SubsidiarySubsidiary of the Company or pro rata dividends or distributions by Joint Venture Entities) or enter into any agreement with respect to the voting of such capital stockGroup Securities or Joint Venture Entity Securities;
(hix) other than as required by Section 5.1(r), reclassify, split, combine, combine or subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, the capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock PlansCompany;
(ix) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Lettercreate, incur or assume any material indebtedness for borrowed money (other than trade payables (including, for avoidance of doubt, indebtedness associated with the purchase of products or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security services of the Company or any of its SubsidiariesCompany) and company credit cards, except for indebtedness for borrowed money incurred in each case in the ordinary course of business consistent with past practices practice) or guarantee, endorse or otherwise become responsible (iwhether directly, contingently or otherwise) not to exceed $200,000 for any such indebtedness;
(xi) other than facilities or technology capital expenditures in the aggregate, (ii) in replacement ordinary course of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms business consistent with past practice and not practice, make or commit to exceed any capital expenditure or expenditures in an amount greater than $250,000 of notional debt 500,000 individually or $2,000,000 in the aggregate;
(jxii) enter into any agreement, arrangement or commitment that materially limits or otherwise restricts the Company or its Subsidiaries from engaging or competing in any line of business or in any geographic area or otherwise enter into any agreements, arrangements or commitments imposing material changes or restrictions on its assets, operations or business, except as set forth in the capital budgets set forth ordinary course of business consistent with past practices;
(xiii) (A) enter into any Contract that, if in Section 6.1(jeffect on the date hereof, would have been a Material Contract (other than in the ordinary course of business consistent with past practices), (B) terminate or amend or modify in any material respect any Material Contract or any Contract that, if in effect on the date hereof, would have been a Material Contract (other than terminations or amendments in the ordinary course of business consistent with past practice), (C) waive in any material respect any term of, or waive any material default under, or release, settle or compromise any material claim against the Company or any of its Subsidiaries or material liability or obligation owing to the Company or any of its Subsidiaries under, any Material Contract or any Contract that, if in effect on the date hereof, would have been a Material Contract or (D) enter into any Contract that contains a change of control provision or any similar provision that would require a payment to the other party or parties thereto as a result of the consummation of the Merger or the other transactions contemplated by this Agreement (including in combination with any other event or circumstance); it being agreed that the entry into, termination, amendment or modification of any Contract that (x) is or would be a Material Contract of the type described in clauses (A), (B), (C), (D), (F) (with respect to entering into a new Real Property Lease or terminating, amending or modifying a Real Property Lease in effect as of the date of this Agreement), (J), (K), (M) or (N) of Section 5.1(j)(i), or (y) will involve payments to or from the Company Disclosure Letter and consistent therewith, make or authorize and/or any capital expenditure of its Subsidiaries in excess of $200,000 15,000,000 in any one-year period, in each case, will not be considered to be in the aggregate during any 12 month periodordinary course of business consistent with past practices;
(kxiv) make any changes with respect to accounting policies or proceduresmaterially change the Company’s methods of accounting, except as required to comply with, by concurrent changes in GAAP or to comply with changes in, GAAPin Regulation S-X of the Exchange Act;
(lxv) settle agree to or otherwise settle, compromise or otherwise resolve in whole or in part any litigation or other proceedings before a Governmental Entity Action for an amount in excess of $200,000 500,000 individually or $2,000,000 in the aggregate; provided, however, neither the Company nor any of its Subsidiaries shall settle any Action (regardless of the amount involved) if any such settlement would impose any material obligation or liability restriction on the Company or its Subsidiaries from time to time or on the Company’s or its Subsidiaries’ ability to own or operate any of its assets, licenses, operations, rights, product lines, businesses or interests therein or require any material changes to the business of the Company in excess of such amountor its Subsidiaries from time to time;
(mxvi) makeexcept as may be required by applicable Law, adopt (A) make a new material Tax election or change any material Tax election election, (B) change any entity classification of any Subsidiary, (C) create a permanent establishment in any country other than the country in which the Company or any of its Subsidiaries is organized, (D) file any amended income Tax Return or other material amended Tax Return, (E) adopt or change any annual Tax accounting methodperiod or material accounting method for Taxes, (F) settle or compromise any material Tax claim, (G) surrender any material claim for a refund of Taxes, (H) enter into any closing agreement relating to Taxes or (I) file any income Tax Return or other material Tax Return that is inconsistent with past practice;
(xvii) take or fail to timely take any action that would reasonably be expected to result in any of the conditions set forth in Article VII (taking into account all applicable extensionsConditions) file all Tax Returns required not to be filedsatisfied or prevent or materially impede the consummation of the transactions contemplated by this Agreement, and pay all Taxes required to be paid, on or before the Closing Dateexcept as permitted under Section 6.2;
(nxviii) transferannounce, sellimplement or effect any material reduction in labor force, leaselay-off, licenseearly retirement program, mortgage, pledge, surrender, encumber, divest, cancel, abandon severance program or allow to lapse other program or expire or otherwise dispose effort concerning the termination of any assets, product lines or businesses employment of employees of the Company (including any “plant closing” or its Subsidiaries“mass layoff” as those terms are defined in the WARN Act or any similar action under a similar Law), including capital stock of any of its Subsidiaries, except for sales or rental of inventory other than routine employee terminations in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets business consistent with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreementpast practice;
(oxix) adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company (other than the Merger);
(xx) except as required by applicable Law or pursuant to existing written, binding agreements or policies the terms of any Benefit Plan as in effect prior to as of the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable LawSchedule, (iA) grant terminate, adopt, establish, enter into, amend or provide renew (or communicate any intention to take such action) any Benefit Plan, (B) increase in any manner the compensation, benefits, severance or termination payments pay of any of the current or benefits to any directorformer directors, officer officers, employees or employee consultants who are natural persons of the Company or any of its Subsidiaries, (iiC) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus toor incentive compensation under any Benefit Plan, other than payments based on actual performance for completed performance periods, (D) accelerate the vesting of or lapsing of restrictions, or make amend the vesting requirements, with respect to any equity-based compensation or other long-term incentive compensation under any Benefit Plan, (E) grant any new equity awards to any directorawards, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend modify the terms of any outstanding equity-based awards, under any Benefit Plan, (ivF) take any action to accelerate the vesting or payment, or to fund or in any other way secure the payment, of compensation or benefits any amounts under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (viG) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to directorsany Company employee, officers (H) hire any employee or employees consultant who is a natural person with a target total annual cash compensation (e.g., base pay or base rate and short-term cash incentive target amounts) opportunity in excess of $200,000, (I) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization or (J) terminate without cause the employment of any executive officer of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the MergerCompany; or
(sxxi) agree, authorize or commit to do any of the foregoing.
(c) Prior to making any broad-based written or oral communications to the officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication (or, in the case of any oral communications, copies of scripts, talking points or other similar materials), upon providing Parent with the communication, Parent shall have a reasonable period of time to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(d) Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company and its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
Appears in 2 contracts
Sources: Merger Agreement (Pcm, Inc.), Merger Agreement (Insight Enterprises Inc)
Interim Operations. j) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time Closing (unless the Parent shall otherwise approve in writing, which determination by the Parent shall not be unreasonably delayed, or as otherwise provided for by this Agreement) and except as required by applicable Laws or as provided for in this AgreementLaws, each the business of the Company and each of its Subsidiaries shall conduct its business be conducted in the ordinary and usual course and, to the extent consistent with past practice and it therewith, the Company shall use commercially reasonable efforts to preserve the Company’s and each of its Subsidiaries’ respective business organizations intact its and maintain their respective existing relations and goodwill with Governmental Entities, clients, customers, suppliers, distributors, creditors, lessors, employees and business organization and relationships with third parties associates and keep available the services of its their respective present officers employees and employeesagents. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective TimeClosing, except (Aas set out in Section 5.1(a) of the Company Disclosure Letter or as otherwise expressly permitted by this Agreement, (B) as the Parent may approve in writing (such approval any determination as to which by the Parent shall not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of otherwise provided for by this Agreement or as expressly required by applicable Laws, neither the Company Disclosure Letter, the Company will not and will not permit nor any of its Subsidiaries towill:
(a1) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instrumentsOrganizational Documents;
(b2) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing Company may amalgamate with 1619372 Ontario Inc., in which case references to the “Company” in this Agreement shall not prohibit entering into, modifying or renewing thereafter be references to the Contracts in corporation resulting from such amalgamation;
(3) acquire assets outside of the ordinary course of business to from any other Person with a value or purchase price in the extent such Contracts can be terminated after aggregate in excess of $250,000 in any such entering intotransaction or series of related transactions, modification or renewal at a cost of less other than $200,000;
(e) except acquisitions pursuant to Contracts in effect prior to as of the date of this Agreement;
(4) issue, create sell, transfer, or incur otherwise dispose of or encumber (including through any Lien material to the Company or pledge) any of its Subsidiaries on any assets Equity Securities of the Company or any of its Subsidiaries having a value in excess of $50,000Subsidiaries;
(f5) create or incur any material Lien on any of its assets, other than in the ordinary course of the business of the Company and its Subsidiaries;
(6) make any loans, advances or capital contributions to or investments in any Person (other than among the Company and its Subsidiaries or in the ordinary course of their business);
(7) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any direct of its Equity Securities;
(8) incur any indebtedness for borrowed money or indirect guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any of its debt securities other than indebtedness for borrowed money incurred in the ordinary course of the business of the Company and its Subsidiaries consistent with past practices (A) not to exceed $500,000 in the aggregate or (B) guarantees incurred in compliance with this Section 5.1 by the Company of indebtedness of its wholly-owned Subsidiary Subsidiaries;
(9) enter into any Contract that would have been a Material Contract had it been entered into prior to the date of this Agreement, except for Contracts (including engagement letters) for the provision of investment banking services in the ordinary course of the Companybusiness;
(10) make any changes with respect to accounting policies or procedures, except as required by changes in GAAP;
(11) amend, modify or terminate any Material Contract, or cancel, modify or waive any debts or claims or waive any rights having in each case a value in excess of $50,000 250,000;
(12) (A) make, change or rescind any Tax election, (B) change any annual Tax accounting period, or change any method of Tax accounting or file for any change in Tax accounting method, (C) file any Tax Return, except as is required to be filed by applicable Law, (D) waive or extend the statute of limitations in respect of material Taxes, (E) settle any material Tax claim or assessment or surrender any right to claim a material Tax refund or (F) settle or finally resolve any Tax contest with respect to any material amount of Tax;
(13) transfer, sell, lease, or otherwise dispose of any of its assets, or businesses, except for sales, transfers, leases, or other dispositions of assets (i) in the ordinary course of the business of the Company and its Subsidiaries, (ii) with a fair market value not in excess of $250,000 in the aggregate, (iii) pursuant to Contracts in effect prior to the date of this Agreement, or (iv) consisting of the cash distributions referred to in Section 5.1(a)(14) of the Company Disclosure Letter;
(g14) except as set forth in Section 5.1(a)(14) of the Company Disclosure Letter, declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries Capital Stock (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned SubsidiarySubsidiary of the Company) or enter into any agreement with respect to the voting of such capital stockits Capital Stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o15) except as required pursuant to existing written, binding agreements or policies in effect prior to as of the date of this Agreement and set forth in Section 5.1(h5.1(a)(15) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any directorof its directors, officer officers or employee employees other than pursuant to existing employment agreements in effect as of the Company date of this Agreement and made available to the Parent or any entered into following the date of its Subsidiariesthis Agreement in the ordinary course consistent with the Company’s current form of employment agreement, provided that Parent be consulted prior to the entry into thereof, (ii) change the methodology for determining compensation and bonus payments to directors, officers or employees other than in the ordinary course of business consistent with past practice, (iii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any directordirectors, officer officers or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, other than in the ordinary course of business consistent with past practice practice, (iiiiv) establish, adopt, amend or terminate any Benefit Plan of its benefit plans or amend the terms of any outstanding equity-based equity awards, (ivv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Planof its benefit plans, to the extent not already provided in any such Benefit Planbenefit plans, (vvi) change any actuarial or other material assumptions used to calculate funding obligations with respect to any Benefit Plan benefit plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; GAAP or (vivii) forgive any loans to any of its directors, officers or employees employees;
(16) exercise any Broker Warrants other than in the ordinary course of business and following consultation with the Parent; provided, however, that with respect to all Broker Warrants granted by each issuer thereof to the Company or any of its Subsidiaries, (i) up to one-third of such Broker Warrants may be exercised at any time; (ii) up to one-third of such Broker Warrants may be exercised only after reasonable consultation with Parent; and (iii) up to one-third of such Broker Warrants may be exercised only with the Parent’s consent; provided further that (x) the portions of the Broker Warrants subject to clauses (ii) and (iii) may be freely exercised by the Company without consultation or the consent of the Parent to the extent that the Broker Warrant would expire on or before January 31, 2008 and (y) any portions of a Broker Warrant that are exercised prior to the date of this Agreement shall be taken into account when determining whether the limitation set forth in clause (i) has been met;
(p17) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $250,000 individually or $500,000 in the aggregate;
(18) take any action or omit to take any action that is reasonably likely to would result in any of the conditions to the Merger Arrangement set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s19) agree, authorize agree or commit to do any of the foregoing.
Appears in 1 contract
Sources: Arrangement Agreement (Thomas Weisel Partners Group, Inc.)
Interim Operations. The Except as set forth in the correspondingly numbered sections of the Company Disclosure Schedule, required by law or as otherwise expressly contemplated by this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreementconsent, each of the Company and its Subsidiaries which consent shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayedand provided that, with respect to clause (ii) or of paragraph (C) as set forth in Section 6.1 e), if Parent shall not have responded within two business days to a written request by the Company for consent then Parent shall be deemed to have consented to the action that was the subject of the Company Disclosure Letter, request) the Company will not shall, and will not permit shall cause its Subsidiaries Subsidiary to:
(a) adopt or propose any change conduct their respective businesses only in its articles of incorporation or bylaws or other applicable governing instrumentsthe ordinary and usual course and, to the extent consistent therewith, use their respective best efforts to preserve their respective business organization intact and maintain their respective existing relations with customers (except as contemplated hereby), suppliers, employees and business associates;
(b) merge not (i) create any subsidiaries; (ii) amend their respective certificate of incorporation or consolidate by-laws; (iii) split, combine or reclassify their outstanding capital stock or (iv) declare, set aside or pay any dividend payable in cash, stock or property, other than any dividends paid by the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesSubsidiary to the Company;
(c) not (i) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of their capital stock of any class or any other property or assets other than (x) shares of Company Common Stock issuable upon exercise of purchase rights outstanding as of the date of this Agreement under the 1999 Stock Purchase Plan (as such plan is in accordance with benefits effect on the date hereof) or (y) shares of Company Common Stock issuable pursuant to the exercise of Company Options outstanding prior to on the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, Option Plans or authorize (z) shares of Company Common Stock issuable pursuant to the issuance, sale, pledge, disposition, grant, 401(k) Plan; (ii) transfer, lease, license, guarantee guarantee, sell, mortgage, pledge, dispose of or encumbrance ofencumber (each a "transaction") any assets, including, without limitation, all intellectual property and technology rights which it owns or uses, or enter into any collaboration; (iii) incur or modify any indebtedness; (iv) incur or modify any other liability other than in the ordinary and usual course of business; (v) acquire directly or indirectly by redemption or otherwise any shares of the capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, Company; or (iivi) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value authorize capital expenditures in excess of $50,000;
(f) make any loans100,000 per calendar quarter or, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary acquisition of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred inventory and supplies in the ordinary course of business consistent with past practices practice, make any acquisition of, or investment in, assets or stock of any other person or entity (iincluding any in-licensing of technology);
(d) not change or increase the compensation payable or to become payable to its directors, officers or employees, or pay any performance based bonuses to its employees for the year ended 2001 (other than bonuses and increases in salary in an amount not to exceed $200,000 300,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by aggregate and provided that the Company would otherwise, after giving effect to the payment of indebtedness of wholly-owned Subsidiaries such bonuses, meet the condition to the consummation of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as Offer set forth in the capital budgets set forth in Section 6.1(jparagraph (f) of Exhibit A hereto), or grant (except pursuant to existing contractual arrangements disclosed in writing to Parent prior to the Company Disclosure Letter and consistent therewithdate hereof) any severance or termination pay to, make or authorize enter into any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies employment or procedures, except as required to comply severance agreement with, or to comply with changes inany director, GAAP;
(l) settle any litigation officer or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses employee of the Company or its SubsidiariesSubsidiary; and not establish, including capital stock of adopt, enter into, make any of its Subsidiariesnew grants or awards under or amend, except for sales or rental of inventory in the ordinary course of businessany collective bargaining, sales of obsolete assets and salesbonus, leasesprofit sharing, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregatethrift, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or stock option, restricted stock, pension, welfareretirement, employee stock ownership, deferred compensation, employment, termination, severance or other benefits ofplan, pay agreement, trust, fund, policy or arrangement for the benefit of any bonus todirectors, officers or make employees;
(e) not (i) settle or compromise any new equity awards to any director, officer material claims or employee of the Company litigation or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adoptmodify, amend or terminate any Benefit Plan of their material Contracts or amend the terms of waive, release or assign any outstanding equity-based awards, rights or claims or (ivii) take enter into any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations Contract with respect to any Benefit Plan or the Company's San Diego facility contract services business pursuant to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company would provide any products or any of its Subsidiariesservices;
(pf) take any action not amend or omit to take any action that is reasonably likely to result in modify, or waive, release or assign any of the conditions Company's rights under, the License Agreement, dated as of September 22, 1998, by and between the Company and Hoechst ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc. (the "HMR License") or the Company's investigational new drug application with respect to the Merger set forth in Article VII not being satisfiedtezacitabine;
(qg) take not make any action that would violate the CIAmaterial tax election, file any material Tax Return taking any position inconsistent with past practice, settle any tax audit, claim or litigation, request any private letter or similar ruling or enter into any tax closing agreement;
(rh) knowingly take or not permit any insurance policy naming it as a beneficiary or a loss payable payee to be canceled or terminated without notice to Parent, except in the ordinary and usual course of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Mergerbusiness; orand
(si) agree, not authorize or commit enter into an agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) Except as set forth in Section 6.1 of the Company Disclosure Letteron Schedule 5.08, the Company will not and will not permit its Subsidiaries tosince ------------------ ------------- June 24, 2000:
(a) adopt or propose any change the Business has been conducted by the Seller only in its articles of incorporation or bylaws or other applicable governing instrumentsthe ordinary and usual course consistent with past practices;
(b) merge or consolidate with respect to the Company or Business, the Seller has not:
(i) suffered any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesMaterial Adverse Effect;
(cii) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plansincurred any liabilities or obligations (absolute, issueaccrued, sellcontingent or otherwise), pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary and usual course of businessbusiness and consistent with past practice, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict withincreased, or result experienced any change in any violation assumptions underlying or breach ofmethods of calculating, any bad debt, contingency or default other reserves;
(with iii) paid, discharged or without notice satisfied any claims, liabilities or lapse of time obligations (absolute, accrued, contingent or both) underotherwise), other than the payment, discharge or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result satisfaction in the creation ordinary and usual course of any encumbrance business and consistent with past practice of liabilities and obligations reflected or reserved against in the Financial Statements or upon incurred in the ordinary and usual course of business and consistent with past practice;
(iv) permitted or allowed any of the properties material Acquired Assets to be subjected to any Encumbrance (except Encumbrances created by law and Permitted Encumbrances);
(v) canceled any debts owing to the Seller or assets of waived any Company claims or Parent or any of its Subsidiaries under such Contract; provided, however, rights that the foregoing shall not prohibit entering into, modifying or renewing the Contracts constitute Acquired Assets other than in the ordinary and usual course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000and consistent with past practices;
(evi) sold, transferred, or otherwise disposed of, any of the Acquired Assets, except in the ordinary and usual course of business and consistent with past practice;
(vii) disposed of, failed to take reasonable steps to protect, or permitted to lapse, any of the Seller's rights for the use of its Owned Intellectual Property, or disposed of, failed to take reasonable steps to protect, or disclosed to any Person any Proprietary Information of the Seller, other than in the ordinary and usual course of business and consistent with past practices, except where the same would not be reasonably expected to have a Material Adverse Effect;
(viii) made any change in any method of accounting or accounting practice;
(ix) except pursuant to Contracts as set forth in effect prior to the date Financial Statements, written down or written up the value of this Agreementany inventory, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value increased inventory levels in excess of $50,000;
(f) make historical levels for comparable periods or written off as uncollectible any loansnotes or accounts receivable, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregatepractice;
(jx) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewithFinancial Statements, make or authorize made any single capital expenditure commitment in excess of $200,000 of$25,000 for additions to property, plant, equipment or intangible capital assets or made capital expenditure commitments in excess of$50,000 in the aggregate during any 12 month periodfor additions to property, plant, equipment or intangible capital assets;
(kxi) make made any changes with respect to accounting policies material change in the manner in which products or proceduresservices have been developed or marketed, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , practice;
(iiixii) establish, adopt, amend had any labor dispute or terminate any Benefit Plan or amend the terms received notice of any outstanding equity-based awardsgrievance;
(xiii) borrowed or agreed to borrow any funds except to cover the cash flow requirements of the Business;
(xiv) other than cash and cash equivalents, paid and/or declared any dividends with respect to its shares of capital stock, whether in shares of capital stock or other property;
(ivxv) take granted to any action to accelerate the vesting officer or paymentemployee any increase in compensation or benefits, or fund or in any other way secure the payment, than increases of compensation or benefits under any Benefit Plan, to employees in the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations ordinary course of business and consistent with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariespast practice;
(pxvi) take paid any action pension, retirement allowance or omit other employee benefit not permitted or required by any plan, policy or program identified on Schedule 5.21 hereto other than in the ordinary course of business consistent with past practices;
(xvii) adopted, agreed to adopt, or made any announcement regarding (i) the adoption of any new pension, retirement or other employee benefit plan, program or policy, or (ii) the adoption of any amendments to any existing plan, policy or program identified on Schedule 5.21 unless otherwise required by applicable law; or -------------
(xviii) suffered or agreed to take any action that is reasonably likely to result in any of the conditions to the Merger actions set forth in Article VII not being satisfied;this subparagraph (ii); and
(qc) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation None of the Merger; or
(s) agree, authorize or commit to do any material assets of the foregoingSeller has been affected in any way as a result of fire, explosion or other casualty (whether or not covered by insurance).
Appears in 1 contract
Interim Operations. The Company Seller covenants and agrees as to itself and its Subsidiaries that, after from the date hereof and prior to of this Agreement until the Effective Time Closing Date (unless Parent the Buyer shall otherwise approve in writing, such approval not to be unreasonably withheld, conditioned or delayed) and except as expressly contemplated by this Agreement, as required by applicable Laws or as provided for in this AgreementLaws, each of the Company and its Subsidiaries Seller shall conduct its business that is conducted with the Purchased Assets (the “Target Business”) in the ordinary course in all material respects and, to the extent consistent with past practice and it therewith, shall use its reasonable best efforts to preserve intact its business organization and maintain the Target Business’ existing relationships with third parties Governmental Entities and keep available material customers, suppliers, distributors, creditors, lessors, insurers, employees, unions, and other material business associates relating to the services of its present officers and employeesTarget Business. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the Effective TimeClosing Date, except (Ax) as otherwise expressly permitted required by this Agreement, (By) as Parent the Buyer may approve in writing (such approval not to be unreasonably withheld withheld, conditioned or delayed) or (Cz) as set forth in Section 6.1 of the Company Seller Disclosure LetterSchedules, the Company Seller will not and will not permit its Subsidiaries towith respect to the Target Business or the Purchased Assets:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(bA) merge or consolidate the Company or any of its Subsidiaries itself with any other Person, or ; (B) restructure, reorganize or completely or partially liquidate the Target Business or otherwise enter into any agreements the Purchased Assets; (C) acquire.(by merger, consolidation, acquisition of stock or arrangements imposing material changes assets or restrictions on its assetsotherwise), operations directly or businesses;
(c) other than in accordance with benefits outstanding prior indirectly, securities or assets for the Target Business or relating to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares Purchased Assets outside of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(fb) make any loans, advances or capital contributions to or investments in any Person (that conduct the Target Business or hold the Purchased Assets, other than trade credit and similar loans and advances made to employees, customers and suppliers in the Company or any direct or indirect wholly-owned Subsidiary ordinary course of business of the Company) in excess of $50,000 in the aggregateTarget Business;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(hc) other than as required by Section 5.1(r)trade debt incurred in the ordinary course of business, reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, Target Business incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person;
(d) make or authorize any capital expenditure for the Target Business other than for capital expenditures that do not, or issue or sell in any debt securities or warrants or calendar year, exceed $50,000;
(A) other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred than in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company Target Business amend, modify, terminate or waive any material right under any Assigned Contract, or (ivB) interest rate swaps on customary commercial terms consistent with past practice and not enter into any contract that would be an Assigned Contract had it been entered into prior to exceed $250,000 of notional debt in the aggregatethis Agreement;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(kA) make any material changes with respect to accounting policies or procedures, except as required to comply withby changes after the date hereof in GAAP, (B) change the Seller’s fiscal year, or (C) make any material change in internal accounting controls or disclosure controls and procedures that could reasonably be expected to comply with changes in, GAAPnegatively affect the Seller;
(lg) settle, propose to settle or compromise any litigation or other proceedings action before a Governmental Entity for an amount relating to the Target Business or the Purchased Assets if such settlement, proposed settlement or compromise (A) with respect to the payment of monetary damages, involves the payment of monetary damages that exceed $100,000 in excess the aggregate (together with all other settlements or compromises after the date of $200,000 this Agreement), net of any amounts covered by insurance that the Seller expects to be promptly paid by the applicable insurer, (B) imposes any material equitable or non-monetary relief, penalty or restriction on the Seller (or, after the Closing Date, the Buyer) with respect to the Target Business or the Purchased Assets, or (C) would reasonably be expected to affect the rights or defenses available to the Seller in any obligation related or liability of similar claims that, individually or in the Company in excess of such amountaggregate, are material to the Target Business or the Purchased Asset, taken as a whole;
(mh) make, adopt change or change rescind any material Tax election elections, change or consent to any change in its material method of accounting for Tax accounting methodpurposes (except as required by applicable Law), amend any material Tax Returns, settle, compromise, concede or fail abandon any material Tax liability, claim or assessment, enter into any material closing agreement, waive or extend any statute of limitations with respect to timely (taking into account all applicable extensions) file all material Taxes or obtain any material Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Dateruling;
(ni) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its SubsidiariesPurchased Assets, including capital stock except (other than with respect to equity interests of any Subsidiary of its Subsidiaries, except for sales the Seller relating to the Target Business) (A) in connection with goods or rental of inventory services provided in the ordinary course of business, (B) sales of obsolete assets and assets, (C) for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 50,000 in the aggregate, other than or (D) pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant Agreement that have been disclosed to existing written, binding agreements or policies in effect the Buyer prior to the date of this Agreement and set forth in Section 5.1(hAgreement;
(j) of enter into any transaction or take any action that, if entered into prior to the Company Disclosure Letterdate hereof, would be a Related Party Transaction relating to the Target Business or Purchased Assets, or as otherwise required by applicable Lawamend, (i) grant or provide any severance or termination payments or benefits to any directorwaive, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend modify or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, existing Related Party Transaction relating to the extent not already provided in any such Benefit Plan, (v) change any actuarial Target Business or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the MergerPurchased Assets; or
(sk) agree, authorize or commit to do any of the foregoing.
Appears in 1 contract
Sources: Asset Purchase Agreement (Standard Dental Labs Inc.)
Interim Operations. The Company covenants Between the Signing Date and agrees as to itself and its Subsidiaries that, after the date hereof and prior to Closing Date or the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from the date earlier termination of this Agreement until the Effective Timein accordance with Article X, except (A) for the Restructuring, as set forth on Schedule 7.1 or as otherwise expressly permitted by this Agreement, (B) as Parent may approve unless Buyer has previously consented in writing (such approval which consent will not to be unreasonably withheld withheld, conditioned, or delayed) or as required by applicable Law (Cprovided that Buyer shall be deemed to consent if Buyer fails to notify Seller of any objection with respect thereto within three (3) as set forth in Section 6.1 Business Days of the Company Disclosure LetterSeller’s request), the Company will not conduct its operations, in all material respects, in the Ordinary Course of Business. Without limiting the foregoing, between the Signing Date and the Closing Date or the earlier termination of this Agreement in accordance with Article X, except for the Restructuring, as set forth on Schedule 7.1 or as contemplated by this Agreement, unless ▇▇▇▇▇ has previously consented in writing (which consent will not permit its Subsidiaries tobe unreasonably withheld, conditioned or delayed), the Company shall not do any of the following:
(a) adopt or propose make any change amendment to the Company’s Organizational Documents (other than in its articles of incorporation or bylaws or other applicable governing instrumentsconnection with the Conversion);
(b) merge issue, grant, pledge, encumber, dispose of, pledge or consolidate sell any capital stock or other equity interests of any kind (include phantom equity or other rights) or other rights to purchase any capital stock or other equity interests of any kind of the Company or any split, combine or subdivide the capital stock of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesthe Company;
(c) other than except in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledgeOrdinary Course of Business, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares material property or assets, except for disposing of such capital stock or such convertible or exchangeable securitiesobsolete assets with an aggregate value of less than $500,000;
(d) materially and adversely modifyexcept for amendments in the Ordinary Course of Business, amend, modify (other than renewals in the Ordinary Course of Business) or terminate or renew any Material Contract or any Contract that would be a Material Contract if it were in existence effect on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent hereof or any other contract that purports to materially restrict the operations of Buyer or its Subsidiaries under such Contract; provided, however, that Affiliates (excluding the foregoing shall not prohibit entering into, modifying or renewing Company) following the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000Closing;
(e) except pursuant to Contracts in effect prior to hire, terminate (other than for cause) or increase the date salary or other compensation of this Agreementany officer, create director or incur any Lien material to the Company or any of its Subsidiaries on any assets other individual service provider of the Company whose annual compensation exceeds $200,000 per year, other than as required by Law, any existing agreement, or the terms of any of its Subsidiaries having a value in excess of $50,000Employee Plan;
(f) make any loans, advances or capital contributions material change to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company’s accounting (including tax accounting) methods, principles or practices, except as may be required by GAAP or changes in excess of $50,000 in the aggregateLaw;
(g) declareimplement or announce any employee layoffs, set asideplant closings, make reductions in force, furloughs, temporary layoffs, salary or pay any dividend wage reductions, work schedule changes or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or such actions that could implicate the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stockWARN Act;
(h) intentionally waive or release any noncompetition, nonsolicitation, nondisclosure, noninterference, nondisparagement, or other restrictive covenant obligation (other than as required by Section 5.1(r)ordinary course confidentiality obligation) of any current or former employee or independent contractor, reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares other than releases of such capital stock, except covenants resulting from the expiration of such covenants in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Planstheir terms;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letterenter into any merger, incur any indebtedness for borrowed money consolidation, reorganization or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregatesimilar agreement;
(j) except as set forth make, revoke or change any material Tax election (excluding, for the avoidance of doubt, in connection with the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) makeRestructuring), adopt or change any material Tax election or Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any material Tax claim or assessment, consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment, fail to timely (taking into account all applicable extensions) file all pay any material amount of Tax Returns required to be filedwhen due, or take a material position on a Tax Return that is materially inconsistent with the past practices and pay all Taxes required to be paid, on or before customs of the Closing DateCompany other than as a result of a change in Law;
(nk) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon make or allow commit to lapse or expire or otherwise dispose of make any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of expenditures that exceed $250,000 500,000 in the aggregate, other than pursuant except for capital expenditures set forth in the budget previously made available to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect Buyer prior to the date of this Agreement and set forth or for emergency expenditures required to maintain the business operations due to unforeseen circumstances, including but not limited to, acts of God, emergencies, or regulatory requirements;
(l) settle or compromise any litigation, claim or investigation in excess of $500,000;
(m) incur or ▇▇▇▇▇ ▇ ▇▇▇▇ (other than a Permitted Lien) on any material assets, properties or rights of the Company;
(n) make any capital contributions or investments in any other Person (other than short-term investments for cash management purposes);
(o) agree to take any of the actions described in clauses (a) through (n) above. Nothing contained in this Section 5.1(h) 7.1 or elsewhere in this Agreement shall preclude the Company, in its sole discretion, from using available Cash to pay indebtedness, transaction expenses, cash dividends or distributions. In addition, nothing contained in this Agreement shall give Buyer, directly or indirectly, the right to control or direct the business or operations of the Company Disclosure Letterprior to the Closing. Prior to the Closing, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiariesshall exercise, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms and conditions of any outstanding equity-based awardsthis Agreement, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of complete control and supervision over its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoingbusiness and operations.
Appears in 1 contract
Interim Operations. The Company Seller covenants and agrees as to itself and its Subsidiaries that, after that from the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective TimeClosing Date, except (A) as otherwise expressly permitted by this Agreementprovided herein, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) required by any existing contract or (C) as set forth otherwise consented to in Section 6.1 of the Company Disclosure Letterwriting by Purchaser, the Company will not and will not permit its Subsidiaries toSeller shall:
3.02.01 Not (aA) adopt or propose in any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries manner deal with, incur obligations with any other Personrespect to, or restructure, reorganize or completely or partially liquidate or otherwise enter into undertake any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) transactions relating to the Resource Assets other than transactions (i) to which the Purchaser has given its prior written consent, which consent shall not be withheld unreasonably, (ii) in accordance with benefits outstanding prior the ordinary and regular course of business of owning the Resource Assets, and (iii) subject to the date hereof under the Company Stock Plans, issue, sell, pledge, terms and conditions of this Agreement; (B) dispose of, grantencumber or relinquish the Permit or any part of the area thereof; (C) waive, transfercompromise or settle any right or claim that would have a material adverse effect on the ownership, encumberoperation or value of any of the Resource Assets ; or (D) commit to any operation, service or related activity with respect to the Resource Assets , which would or could reasonably be expected to require expenditures (capital, maintenance, expense or otherwise) in excess of $25,000 in the aggregate (except emergency operations whereupon Seller shall give notice of such expenditure to Purchaser at the earliest possible time, including a statement of the amount of such expenditure and the facts which bring the expenditure within such exception), or authorize terminate, materially amend or extend any agreement materially affecting the Resource Assets without the prior consent of Purchaser, which consent shall not be unreasonably withheld.
3.02.02 Promptly notify Purchaser of any suit, lessor demand action, or other proceeding before any court, arbitrator, or governmental agency and any cause of action which relates to Seller and/or the Resource Assets or which might result in impairment or loss of any portion of the Resource Assets or which might hinder or impede the operation of the Permit.
3.02.03 Make or give all notifications, filings, consents or approvals from, to or with all governmental authorities, and will cooperate with Purchaser in obtaining the issuance, sale, pledge, disposition, grant, assignment or transfer, leaseas the case may be, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares by each such authority of such capital stock, or any options, warrants or other rights of any kind permits as may be necessary for Purchaser to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially own and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on operate the date hereof, (i) except in Resource Assets following the ordinary course of business, or (ii) if consummation of the transactions contemplated by in this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such ContractAgreement; provided, however, provided that the foregoing Seller shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business be required to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value expense in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent connection therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws or as provided for in this AgreementLaws, each the business of the Company it and its Subsidiaries shall conduct its business be conducted in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and it its Subsidiaries shall use reasonable their respective best efforts to preserve their business organizations intact its and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business organization and relationships with third parties associates and keep available the services of its and its Subsidiaries’ present officers employees and employeesagents. Without limiting the generality of the foregoing, and in furtherance thereof, from the date of this Agreement hereof until the Effective Time, except (A) as otherwise expressly permitted required by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will shall not and will shall not permit its Subsidiaries to:
(ai) adopt or propose any change in its articles certificate of incorporation or bylaws by-laws or other applicable governing instruments;
(bii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(ciii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $100,000 in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in accordance with benefits outstanding prior to effect as of the date hereof under the Company Stock Plans, hereof;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guarantee, or encumbrance of, any shares of capital stock of the Company or any of its SubsidiariesSubsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, except pursuant to the exercise of Warrants or Options as contemplated by this Agreement;
(dv) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets not incurred in the ordinary course of the Company or any of its Subsidiaries having a value in excess of $50,000business consistent with past practice;
(fvi) make any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 100,000 in the aggregate;
(gvii) (A) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary; (B) repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any of its capital stock or other securities or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other securities, except for any split, combination or reclassification of capital stock of a wholly-owned Subsidiary of the Company, or any issuance or authorization or proposal to issue or authorize any securities of a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company, or (C) enter into any agreement with respect to the voting of such its capital stock;
(hviii) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt 100,000 in the aggregate;
(jix) except as set forth in the capital budgets set forth in Section 6.1(j6.1(i)(ix) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during (x) enter into any 12 month periodContract that would have been a Material Contract had it been entered into prior to this Agreement;
(kxi) make any changes with respect to accounting policies or procedures, except as required to comply with, by changes in applicable generally accepted accounting principles or to comply with changes in, GAAPas recommended by the Company’s independent public auditors;
(lxii) settle any litigation actions, suits, claims, hearings, arbitrations, investigations or other proceedings before a Governmental Entity for an amount in excess of $200,000 100,000 or any obligation or liability of the Company in excess of such amount;
(mxiii) amend, modify or terminate any Material Contract, or cancel, modify or waive any material debts or claims held by it or waive any material rights;
(xiv) (A) make, change, or rescind any material Tax election, (B) file any material amended Tax Return of the Company or any of the Subsidiaries, (C) or adopt or change any material method or period of Tax election accounting, (D) settle or Tax accounting method, or fail compromise any material claim relating to timely Taxes; (taking E) surrender any claim for a refund of Taxes; (F) enter into account all applicable extensionsany closing agreement relating to Taxes; (G) file all any material Tax Return that is inconsistent with past practice; (H) consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns required to be filed, and pay all Taxes required to be paid, on or before obtained in the Closing Dateordinary course of business);
(nxv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines lines, businesses or businesses interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in connection with services provided in the ordinary course of business, business and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 100,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreementhereof;
(oxvi) assign or grant an exclusive license of any material right in any Intellectual Property of the Company necessary or useful for the manufacture, use, sale, offer for sale or export of any Medical Device or that otherwise enables a third party to compete with the Company with respect to the manufacture or sale of any product that competes with any Medical Device;
(xvii) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and hereof, as set forth in Section 5.1(h5.1(h)(i) of the Company Disclosure Letter, or as otherwise required by applicable Law, (iA) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (iiB) increase in any manner the compensation, bonus or bonus, pension, welfare, fringe, severance or other benefits of, pay any bonus to, or make any new equity awards to any current or former director, officer officer, employee or employee consultant of the Company or any of its Subsidiaries, except(C) become a party to, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, commence participation in, amend or terminate any Benefit Plan stock option plan or other stock-based compensation plan, or any compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement with or for the benefit of any current or former directors, officers, employees or consultants of the Company or its Subsidiaries (or newly hired employees) or amend the terms of any outstanding equity-based awards, (ivD) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (vE) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization, (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vivii) forgive any loans or issue any loans to directors, officers or employees of the Company or any of its Subsidiaries;.
(pxviii) take any action or omit to take any action that is would reasonably likely be expected to result in any of the Tender Offer Conditions or the conditions to the Merger set forth in Article VII VIII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(sxix) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any written or oral communications to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the Transactions, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time (but in any event no more than three (3) business days) to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
Appears in 1 contract
Interim Operations. The Company covenants and agrees Except as (i) Buyer shall otherwise approve in writing, such approval not to itself and its Subsidiaries thatbe unreasonably withheld, conditioned or delayed or (ii) otherwise expressly contemplated by this Agreement, after the date hereof and prior to the Effective Time Closing, Seller shall, (unless Parent shall otherwise approve in writingx) and except as required by applicable Laws or as provided for in this Agreement, each of conduct the Company and its Subsidiaries shall conduct its business Business in the ordinary course consistent with past practice and it shall practice, (y) use its commercially reasonable efforts to preserve the Business organization intact and, with respect to the Business, maintain existing relations and goodwill with all Governmental Authorities, customers, suppliers, distributors, creditors, lessors, employees and business associates and (iii) use its business organization and relationships with third parties and commercially reasonable efforts to keep available the services of its present officers and employeesthe Business Employees. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Timeforegoing and in furtherance thereof, except as (Aa) as Buyer shall otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (writing, such approval not to be unreasonably withheld or delayed) delayed or (Cb) as set forth in Section 6.1 of otherwise expressly contemplated by this Agreement, after the Company Disclosure Letterdate hereof, the Company will not and will not permit its Subsidiaries toSeller shall not:
(a) adopt directly or propose indirectly sell, transfer, pledge, distribute, create any change Liens on the Acquired Assets (other than Permitted Liens) or otherwise dispose of any Acquired Assets, except for the sale of products or services in its articles of incorporation or bylaws or other applicable governing instrumentsthe Ordinary Course;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesamend Seller’s Organizational Documents;
(c) merge or consolidate with any other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesPerson;
(d) materially and adversely modifywith respect to the Business, terminate make (or renew revoke) or otherwise change any Material material election with respect to Taxes, enter into a closing agreement or other agreement with any Governmental Authority with respect to Taxes, consent to an extension or waiver of the statute of limitations applicable to any Tax claim or assessment, or take any other similar action;
(e) discontinue any business material to the Business;
(f) amend or terminate, or waive, release or assign any rights or claims with respect to, any Assumed Contract or Permit of the Business other than in the Ordinary Course;
(g) settle, or consent to any settlement of, any material Action or enter into any consent decree, with regard to any Action related to the Business;
(h) enter into any Contract relating to the Business that would be a Material Contract if in existence on of the date hereof, Business;
(i) except in enter into any Contract with any Related Party or Affiliate of Seller;
(j) increase the ordinary course of businesssalary, wages or (ii) if consummation of the transactions contemplated by this Agreement other compensation or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach benefits of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person terminate (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiarycause) or enter into reduce by more than 50% the hours worked by, any agreement with respect to the voting of such capital stock;
Business Employee (h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide Law or redeem, purchase or otherwise acquire, directly or indirectly, the terms of any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except Company Benefit Plan in accordance with cashless exercise provisions of rights granted prior to effect on the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month periodhereof);
(k) make grant any changes with respect severance rights or any retention, change in control, annual or other bonus (whether monetary or otherwise) or advance (excluding advances for ordinary business expenses in the Ordinary Course) to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAPany Business Employee;
(l) settle abandon, fail to maintain, surrender, cancel or otherwise annul, or grant any litigation rights, waivers or covenants not to ▇▇▇ with respect to any Acquired IPR, other proceedings before a Governmental Entity for an amount than in excess of $200,000 or any obligation or liability of the Company in excess of such amount;Ordinary Course; or
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit agree to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoingforegoing actions.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from Between the date of this Agreement until and the Effective TimeClosing or the earlier termination of this Agreement in accordance with Article IX, except (Afor any COVID-19 Actions set forth on Schedule 4.18(a) and except as otherwise set forth on Schedule 7.1, or as expressly permitted by this Agreement, (B) as Parent may approve unless Buyer has previously consented in writing (such approval which Buyer agrees shall not to be unreasonably withheld withheld, conditioned or delayed) or as required by applicable Law, Sellers will (Ci) conduct the operation of the EPSi Business in the Ordinary Course of Business and (ii) use commercially reasonable efforts to preserve present relationships with suppliers and customers having business dealings with the EPSi Business. Without limiting the foregoing, between the date of this Agreement and the Closing or the earlier termination of this Agreement in accordance with Article IX, except as set forth on Schedule 7.1 or as expressly permitted by this Agreement, unless Buyer has previously consented in Section 6.1 writing (which Buyer agrees shall not be unreasonably withheld, conditioned or delayed) or as required by applicable Law or the COVID-19 Actions, Sellers shall not do any of the Company Disclosure Letter, following (to the Company will not and will not permit its Subsidiaries to:extent related to the EPSi Business or to the extent the EPSi Business is affected):
(a) adopt (i) except in the Ordinary Course of Business, transfer, lease, acquire or propose dispose of, any change in its articles of incorporation non-de minimis property or bylaws assets that would otherwise constitute Purchased Assets, (ii) mortgage or encumber, or subject to any Lien (other applicable governing instrumentsthan Permitted Liens), any property or assets that would constitute Purchased Assets, or (iii) cancel any debts owed to or claims held by Sellers with respect to the EPSi Business;
(b) merge other than in the Ordinary Course of Business, enter into, amend, modify, renew, accelerate, cancel, grant any waiver or consolidate the Company or any of its Subsidiaries with any other Personrelease under, or restructureassign any rights or claims under, reorganize or completely or partially liquidate or otherwise enter into terminate any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesMaterial Contract;
(c) other than in accordance with the Ordinary Course of Business, enter into, adopt, amend, terminate, or increase the amount of benefits outstanding prior or compensation (including any bonus) due under, any Employee Plan or other benefit or compensation plan, program, Contract, or arrangement applicable to the date hereof under Business Employees, including any agreement relating to the Company Stock Planscompensation or severance of any Business Employee other than in the Ordinary Course of Business, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize except to the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company extent required by Law or any its Subsidiaries, existing Contracts or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if Employee Plans in existence effect on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoing.
Appears in 1 contract
Sources: Asset Purchase Agreement (Allscripts Healthcare Solutions, Inc.)
Interim Operations. The Company covenants and agrees that, except (i) as to itself and its Subsidiaries thatexpressly contemplated by this Agreement, or (ii) as agreed in writing by Parent, after the date hereof hereof, and prior to the Effective Time earlier of (unless Parent x) the termination of this Agreement in accordance with Article XI and (y) the Stock Purchase Closing Date, the Company shall, and shall otherwise approve in writingcause each of its Subsidiaries (including for purposes of this Section 6.1 the Clubs) to:
(a) conduct the business, operations, activities and except as required by applicable Laws or as provided for in this Agreement, each practices of the Company and its Subsidiaries shall conduct its business in and the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoingClub, from the date of this Agreement until the Effective Timerespectively, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000consistent with past practice;
(eb) except pursuant use its reasonable best efforts to Contracts in effect prior to the date of this Agreementpreserve its present business organization intact and maintain satisfactory relations with customers, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries employees, contractors, regulators and others having a value in excess of $50,000business dealings with it;
(fc) not amend its articles or certificates of incorporation or bylaws or comparable governing instruments;
(d) not, (i) except for (A) borrowing under Material Contracts (including, without limitation receivables purchase agreements) listed on Schedule 3.10(i), as in effect on the date hereof, and (B) additional borrowings from a recognized financial institution not involving the financing of VOI Receivables in a maximum amount of fifteen million dollars ($15,000,000.00) on terms that do not impose in relation to the sum being borrowed any material prepayment penalties, incur, or assume or become subject to, whether directly, indirectly or by way of guarantee or otherwise, any indebtedness (long-term, short-term or otherwise) for borrowed money, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person; or (iii) make any loans, advances or capital contributions to to, or investments in in, any other Person (x) other than the Company or any direct or indirect wholly-owned Subsidiary of the Company, (y) other than loans in excess the form of VOI Receivables and (z) ordinary advances (A) to employees for travel and related business expenses and (B) to commission-based sales representatives not exceeding $50,000 40,000 for any individual and $500,000 in the aggregate, in the case of each of clauses (x) through (z), in the ordinary course of business consistent with past practice;
(ge) declarenot (x) issue, set asidesell, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect grant pursuant to any of its capital stock or Plan (including the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or Option Plan), pledge, encumber, subject to any other direct Lien or indirect wholly-owned Subsidiarydispose of, (y) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide combine or reclassify or (z) redeem, purchase or otherwise acquire, directly or indirectlyin each case, any shares of its, any class or series of its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except other equity interest in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) or any of the Company Disclosure Letterits Subsidiaries or any options, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire purchase any debt security such capital stock or equity interest or any securities convertible into or exchangeable for such capital stock or equity interests or otherwise make or effect any change in the issued and outstanding capitalization of the Company or any of its Subsidiaries, except for indebtedness shares of Company Common Stock issued prior to the Effective Time (A) upon the exercise of the Options outstanding on the date hereof under the Option Plan or (B) in the ordinary course of business pursuant to rights granted under the Company ESPP;
(f) not declare, set aside or pay any dividend or make any distribution of any assets of any kind whatsoever (i) to any of its shareholders including, without limitation, distributions in redemption of or as the purchase price for borrowed money incurred any capital stock or equity interest, or (ii) in discharge or cancellation, in whole or in part, of any indebtedness, whether in payment of principal, interest or otherwise; provided, however, that the Company may redeem -------- ------- shares of Company Common Stock from Majority Shareholder in exchange for TII (as defined in Section 7.15 below) pursuant to its agreement set forth in Section 7.15 and the Redemption Agreement;
(g) except as set forth in Schedule 6.1(g), not (i) sell, lease, transfer, assign, license, mortgage, pledge, encumber, subject to any Liens (other than (but not including for the purposes of this exception, Vacation Credits) Permitted Liens) or otherwise dispose of any of its assets, except for (x) sales to consumers of VOIs in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregatepractice, (iiy) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, tangible personal property in the ordinary course of business consistent with past practice , and (iiiz) establish, adopt, amend or terminate any Benefit Plan or amend the terms disposition of any outstanding equity-based awards, (iv) take any action TII to accelerate Majority Shareholder in accordance with Section 7.15 and pursuant to the vesting or paymentRedemption Agreement, or fund or in any other way secure the payment(ii) license, dispose of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit to lapse any of its Subsidiaries to take right under or respecting, or enter into any action that is reasonably likely to prevent settlement regarding the consummation of the Merger; or
(s) agreeinfringement of, authorize or commit to do any of the foregoing.Intellectual Property;
Appears in 1 contract
Sources: Agreement and Plan of Merger and Reorganization (Cendant Corp)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after From the date hereof through the Closing, the Shareholders will cause the Companies to conduct their business so as to maintain and prior to preserve their respective properties, businesses, subscribers, and other assets, including the goodwill of Venezuelan regulatory authorities. From the Effective Time (unless Parent shall otherwise approve Date through the Closing, IWCH will, from time to time, advise and consult with Purchaser concerning significant developments in writing) and except as required by applicable Laws or as provided for in this Agreement, each the operations of the Company Companies, including but not limited to, capital requirements, management and its Subsidiaries shall conduct its business in operating developments and regulatory developments. IWCH and the ordinary course consistent with past practice and it shall Purchaser will use their respective reasonable efforts in good faith to preserve intact its business organization and relationships with third parties and keep available agree upon any actions that may be necessary or advisable for the services of its present officers and employeesCompanies to take in response to any such developments, which actions may include Purchaser providing capital for the Companies on an interim basis upon mutually acceptable terms. Without limiting Commencing upon the generality Closing, at the request of the foregoingPurchaser, from the date Shareholders shall cooperate with Purchaser and use their respective commercially reasonable best efforts to, and cause the Companies to, obtain all necessary regulatory or other approvals required for the exercise of this Agreement until the Effective TimeOptions. From the Closing through the RMD Venezuela Option Closing, except (A) as otherwise IWCH and the Shareholders shall cause RMD Venezuela to not, unless expressly permitted by hereunder, unless compliance with this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 sentence would cause a breach of the Company Disclosure Letterconcession agreement between RMD Venezuela and the Republic of Venezuela, or with the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose prior written consent of Purchaser: CONFIDENTIAL TREATMENT REQUESTED amend any change provision of their constituent documents; engage in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries transaction with any other Person, Shareholder or restructure, reorganize or completely or partially liquidate or otherwise enter into in any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) transaction other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business; make any material or substantive change in their business or capital structure; incur any indebtedness; issue any capital stock or any rights, warrants or (ii) if consummation of the transactions contemplated by this Agreement options to purchase its capital stock; make any dividend or compliance by the Company with the provisions of this Agreement will conflict withdistribution; or sell, transfer, encumber or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or pledge any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in practice. From and after the aggregateClosing, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with the Purchaser shall indemnify and hold harmless the Shareholders and their respective directors, officers, partners, agents, employees and controlling persons from and against any and all claims, liabilities, costs, damages, expenses and losses suffered or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except them as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose result of any assets, product lines actions or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required inactions by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company Purchaser or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations affiliates with respect to any Benefit Plan RMD Venezuela, including, without limitation, actions or inactions pursuant to change the manner in which contributions to such plans are made Power of Attorney or the basis on which such contributions are determinedMarketing Agreement between RMD Venezuela and the Purchaser (the "RMD Marketing Agreement") or any violation of the concession agreement between the Republic of Venezuela and RMD Venezuela caused by the Purchaser during the RMD Venezuela Option Period. From and after the Closing, except as may be required by GAAP; or (vi) forgive any loans to each of the Shareholders shall jointly and severally indemnify and hold harmless the Purchaser and its directors, officers officers, partners, agents, employees and controlling persons from and against any and all claims, liabilities, costs, damages, expenses and losses suffered or employees incurred by Purchaser as a result of any actions or inactions (following a reasonable request by the Company Purchaser to make or execute a lawful filing with any of its Subsidiaries;
(pVenezuelan governmental authority) take any action or omit to take any action that is reasonably likely to result in by any of the conditions Shareholders with respect to RMD Venezuela or any concession agreement between the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit Republic of Venezuela and RMD Venezuela by any of its Subsidiaries to take any action that is reasonably likely to prevent the Shareholders during the RMD Venezuela Option Period which prevents the exercise or consummation of the Merger; or
(s) agree, authorize RMD Venezuela Option or commit the ability of RMD Venezuela to do any operate the Qualified Channels or of the foregoingPurchaser to obtain the benefits of the RMD Marketing Agreement.
Appears in 1 contract
Sources: Letter of Intent (International Wireless Communications Holdings Inc)
Interim Operations. The Except as set forth in the correspondingly numbered sections of the Company Disclosure Schedule, required by law or as otherwise expressly contemplated by this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreementconsent, each of the Company and its Subsidiaries which consent shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayedand provided that, with respect to clause (ii) or of paragraph (C) as set forth in Section 6.1 e), if Parent shall not have responded within two business days to a written request by the Company for consent then Parent shall be deemed to have consented to the action that was the subject of the Company Disclosure Letter, request) the Company will not shall, and will not permit shall cause its Subsidiaries Subsidiary to:
(a) adopt or propose any change conduct their respective businesses only in its articles of incorporation or bylaws or other applicable governing instrumentsthe ordinary and usual course and, to the extent consistent therewith, use their respective best efforts to preserve their respective business organization intact and maintain their respective existing relations with customers (except as contemplated hereby), suppliers, employees and business associates;
(b) merge not (i) create any subsidiaries; (ii) amend their respective certificate of incorporation or consolidate by-laws; (iii) split, combine or reclassify their outstanding capital stock or (iv) declare, set aside or pay any dividend payable in cash, stock or property, other than any dividends paid by the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesSubsidiary to the Company;
(c) not (i) issue, sell, pledge, dispose of or encumber any additional shares of, or securities convertible or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of their capital stock of any class or any other property or assets other than (x) shares of Company Common Stock issuable upon exercise of purchase rights outstanding as of the date of this Agreement under the 1999 Stock Purchase Plan (as such plan is in accordance with benefits effect on the date hereof) or (y) shares of Company Common Stock issuable pursuant to the exercise of Company Options outstanding prior to on the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, Option Plans or authorize (z) shares of Company Common Stock issuable pursuant to the issuance, sale, pledge, disposition, grant, 401(k) Plan; (ii) transfer, lease, license, guarantee guarantee, sell, mortgage, pledge, dispose of or encumbrance ofencumber (each a "transaction") any assets, including, without limitation, all intellectual property and technology rights which it owns or uses, or enter into any collaboration; (iii) incur or modify any indebtedness; (iv) incur or modify any other liability other than in the ordinary and usual course of business; (v) acquire directly or indirectly by redemption or otherwise any shares of the capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, Company; or (iivi) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value authorize capital expenditures in excess of $50,000;
(f) make any loans100,000 per calendar quarter or, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary acquisition of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred inventory and supplies in the ordinary course of business consistent with past practices practice, make any acquisition of, or investment in, assets or stock of any other person or entity (iincluding any in-licensing of technology);
(d) not change or increase the compensation payable or to become payable to its directors, officers or employees, or pay any performance based bonuses to its employees for the year ended 2001 (other than bonuses and increases in salary in an amount not to exceed $200,000 300,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by aggregate and provided that the Company would otherwise, after giving effect to the payment of indebtedness of wholly-owned Subsidiaries such bonuses, meet the condition to the consummation of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as Offer set forth in the capital budgets set forth in Section 6.1(jparagraph (f) of Exhibit A hereto), or grant (except pursuant to existing contractual arrangements disclosed in writing to Parent prior to the Company Disclosure Letter and consistent therewithdate hereof) any severance or termination pay to, make or authorize enter into any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies employment or procedures, except as required to comply severance agreement with, or to comply with changes inany director, GAAP;
(l) settle any litigation officer or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses employee of the Company or its SubsidiariesSubsidiary; and not establish, including capital stock of adopt, enter into, make any of its Subsidiariesnew grants or awards under or amend, except for sales or rental of inventory in the ordinary course of businessany collective bargaining, sales of obsolete assets and salesbonus, leasesprofit sharing, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregatethrift, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or stock option, restricted stock, pension, welfareretirement, employee stock ownership, deferred compensation, employment, termination, severance or other benefits ofplan, pay agreement, trust, fund, policy or arrangement for the benefit of any bonus todirectors, officers or make employees;
(e) not (i) settle or compromise any new equity awards to any director, officer material claims or employee of the Company litigation or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adoptmodify, amend or terminate any Benefit Plan of their material Contracts or amend the terms of waive, release or assign any outstanding equity-based awards, rights or claims or (ivii) take enter into any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations Contract with respect to any Benefit Plan or the Company's San Diego facility contract services business pursuant to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company would provide any products or any of its Subsidiariesservices;
(pf) take any action not amend or omit to take any action that is reasonably likely to result in modify, or waive, release or assign any of the conditions Company's rights under, the License Agreement, dated as of September 22, 1998, by and between the Company and Hoechst ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc. (the "HMR License") or the Company's investigational new drug application with respect to the Merger set forth in Article VII not being satisfiedtezacitabine;
(qg) take not make any action that would violate the CIAmaterial tax election, file any material Tax Return taking any position inconsistent with past practice, settle any tax audit, claim or litigation, request any private letter or similar ruling or enter into any tax closing agreement;
(rh) knowingly take or permit any insurance policy naming it as a beneficiary or a loss payable payee to be canceled or terminated without notice to Parent, except in the ordinary and usual course of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Mergerbusiness; orand
(si) agree, not authorize or commit enter into an agreement to do any of the foregoing.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writingwriting (such approval not to be unreasonably withheld or delayed), and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws or as provided for in this AgreementLaws, each the business of the Company it and its Subsidiaries shall conduct its business be conducted in the ordinary and usual course and, to the extent consistent with past practice therewith, it and it its Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact its and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business organization and relationships with third parties associates and keep available the services of its and its Subsidiaries’ present officers employees and employeesagents. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted required or expressly contemplated by this Agreement, (B) as reasonably responsive to a requirement of applicable Law or any Governmental Entity, (C) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (CD) except with respect to clause (xvii), as to which this clause (D) will not apply, as set forth in Section 6.1 6.1(a) of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(ai) adopt or propose any change in its articles certificate of incorporation or bylaws or other applicable governing instruments;
(bii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes with similar effect on the Company’s or restrictions on any of its Subsidiaries’ assets, operations or businesses;
(ciii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $4 million, other than acquisitions pursuant to Contracts in accordance with benefits outstanding prior to effect as of the date hereof under the Company Stock Plans, of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its SubsidiariesSubsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary and other than shares issuable in accordance with existing rights under the Stock Plans), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(dv) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries Encumbrance on any material assets of the Company or any of its Subsidiaries having a value in excess of $50,000Subsidiaries;
(fvi) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-wholly owned Subsidiary of the Company) in excess of $50,000 in the aggregate);
(gvii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-wholly owned Subsidiary to the Company or to any other direct or indirect wholly-wholly owned Subsidiary) or enter into any agreement with respect to the voting of such its capital stock;
(hviii) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such its capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(iix) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (ix) not to exceed $200,000 35 million in the aggregate, aggregate or (iiy) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replacedmoney, (iiiB) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-wholly owned Subsidiaries of the Company or (ivC) interest rate swaps in respect of newly incurred indebtedness on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregatepractice;
(jx) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize commit to make any capital expenditure in excess of (A) $200,000 15 million in the aggregate during any 12 month periodcalendar quarter or (B) $38 million in any calendar year;
(kxi) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xii) make any material changes with respect to accounting policies or procedures, except as required to comply with, by changes in GAAP or to comply with changes in, GAAPinterpretations thereof;
(lxiii) settle any litigation or other proceedings before a Governmental Entity or any claim, dispute, litigation or arbitration for an amount in excess of $200,000 2 million individually (or $10 million in the aggregate);
(xiv) amend or modify in any obligation material respect or liability of the Company terminate any Material Contract, or cancel or modify in any material respect or waive any debts or claims held by it or waive any rights having in each case a value in excess of such amount$2 million individually (or $10 million in the aggregate);
(mxv) makemake any material Tax election, adopt settle any Tax claim or change any material Tax election or method of Tax accounting method, in excess of $3 million individually or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before $10 million in the Closing Dateaggregate;
(nxvi) transfer, sell, suffer an Encumbrance, or lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales in connection with services provided or rental of inventory products sold in the ordinary course of business, business and sales of obsolete assets not constituting a product line or business and except for sales, leases, licenses or other dispositions of assets not constituting a product line or business with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Hydril Co)
Interim Operations. (a) CPI covenants and agrees that, after the date hereof and prior to the CPI Merger Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except as set forth in Section 6.1(a) of the CPI Disclosure Letter, or as otherwise contemplated by this Agreement, the Asset Purchase Agreement or the Ancillary Agreements):
(i) it shall conduct its business as a holding company for Company Shares in the ordinary course of business, consistent with past practice and comply in all material respects with all applicable Laws, including Environmental Laws;
(ii) it shall not (A) issue, sell, pledge, dispose of or encumber any Company Shares; (B) amend its certificate of incorporation or bylaws except pursuant to the Recapitalization Amendment; (C) split, combine or reclassify its outstanding shares of capital stock, except pursuant to the Recapitalization Amendment; or (D) repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock except pursuant to the Recapitalization Amendment;
(iii) it shall not issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any CPI Voting Debt or any material property or assets except pursuant to the Recapitalization Amendment;
(iv) it shall not incur any material liability or obligation or otherwise engage in any activity or take any action other than in furtherance of the consummation of the transactions pursuant to this Agreement in accordance with the provisions of this Agreement; provided, however, that prior to the due adoption of this Agreement by holders of the Company Shares constituting the Company Requisite Vote, CPI shall not be prohibited by this clause (iv) from providing information at the Company's request in response to a request therefor by a Person who has made an unsolicited bona fide written Acquisition Proposal pursuant to clause (B) of the proviso in Section 6.2(a) or from participating in negotiations or discussions by the Company with a Person pursuant to clause (C) of the proviso in Section 6.2(a);
(v) it shall not change in any material respect any of the accounting principles or practices used by it, except as may be required as a result of a change in GAAP; and
(vi) it shall not make any tax election without prior notice to Parent, except in the ordinary course of business; and
(vii) it shall not authorize or enter into an agreement to do any of the foregoing.
(b) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Company Merger Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, each of the Company and its Subsidiaries which approval shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) , and except as set forth in Section 6.1 of otherwise contemplated by this Agreement, the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:Asset Purchase Agreement or the Ancillary Agreements):
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except it shall operate the business of it and its Subsidiaries (other than such portion as comprises the Business) only in the ordinary course of business, or consistent with past practice and in material compliance with all applicable Laws, and, to the extent consistent with such operation, use commercially reasonable efforts to: (A) preserve the present business organization intact; and (B) preserve any beneficial business relationships with all customers, suppliers, Government Entities, and others having business dealings with the business of it and its Subsidiaries (other than such portion as comprises the Business);
(ii) if consummation it shall maintain (A) the material assets of the transactions contemplated by this Agreement or compliance by Company and its Subsidiaries (other than the Purchased Assets) in such condition and repair consistent with past practice, and (B) insurance upon all of the material assets of the Company and its Subsidiaries (other than the Purchased Assets) and with respect to the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any conduct of the properties or assets business of any the Company or Parent or any of and its Subsidiaries under such Contract; provided(other than the Business) in full force and effect, howevercomparable in amount, scope, and coverage to that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to on the date of this Agreement;
(iii) it shall not (A) authorize, create issue, deliver, sell, pledge, dispose of or incur encumber any Lien material to the Company or capital stock owned by it in any of its Subsidiaries on any assets that are not Transferred Subsidiaries (as defined in the Asset Purchase Agreement); (B) amend its or its Subsidiaries' or certificate of incorporation or bylaws or equivalent organizational documents; (C) split, combine or reclassify (including causing the conversion of Class B Common Shares to Common Shares pursuant to Article FOURTH, Section 2(e)(1)(iii) of the Company or any certificate of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary incorporation of the Company) in excess its or its Subsidiaries' outstanding shares of $50,000 in the aggregate;
capital stock; (gD) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwiseotherwise in respect of any capital stock other than dividends from its direct or indirect wholly owned Subsidiaries and other than, in the case of the Company, regular quarterly cash dividends not in excess of $0.08 per Company Share per quarter (paid to record holders of stock on a date set consistent with respect past practice); or (E) repurchase, redeem or otherwise acquire, except, in the case of the Company in each case set forth above, in connection with the Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible into or exchangeable into or exercisable for any shares of such its capital stock;
(iv) neither it nor any of its Subsidiaries that are not Transferred Subsidiaries shall (A) issue, except authorize, deliver, grant, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Company Voting Debt (other than, in accordance with cashless exercise provisions the case of rights granted prior the Company, Company Common Shares issuable pursuant to Company Options or Stock Awards outstanding on the date hereof under the Company Stock Plans;
); (iB) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money lease or guarantee such indebtedness of another Personotherwise dispose of, or issue grant or sell any debt securities option or warrants or other rights right to acquire any debt security purchase that portion of the Company or any of its SubsidiariesCompany's business that does not include the Purchased Assets, except for indebtedness for borrowed money incurred in the ordinary course of business business, consistent with past practices practice; or (iC) not to exceed $200,000 in the aggregatesell, (ii) in replacement assign, transfer, convey or otherwise dispose of existing indebtedness for borrowed money on terms substantially consistent with any material asset or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries right of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 subject any of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) assets of the Company Disclosure Letter and consistent therewith(other than the Purchased Assets) to any further material lien, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, leasecharge, license, mortgage, pledge, surrendersecurity interest or similar encumbrance (each, encumberan "Encumbrance"), divestother than (i) Permitted Encumbrances (as defined in the Asset Purchase Agreement) (ii) as reflected, cancel, abandon or allow to lapse or expire reserved or otherwise dispose of any assetsdisclosed in the Audited Pro Forma Financial Statements, product lines the Interim Pro Forma Financial Statements or businesses of the financial statements included in or incorporated by reference in the Company Reports filed prior to the date of this Agreement or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory (iii) in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets consistent with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreementpast practice;
(ov) except as required pursuant to existing writtenneither it nor any of its Subsidiaries shall terminate, binding agreements establish, adopt, enter into, make any new grants or policies awards under, amend or otherwise modify, any Compensation and Benefit Plans or arrangement that would be a Compensation and Benefit Plan if it were in effect prior on the date hereof, or pay or promise to pay, any bonus, profit-sharing or special compensation to the date Employees or Directors or make any increase in the compensation or benefits payable or to become payable to any of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Lettersuch Employees or Directors, or as otherwise hire, without the consent of Parent which consent shall not be unreasonably withheld, any employee who would be entitled to an annual base salary greater than $100,000, except (A) for changes that are required by applicable Law, (iB) grant or provide to satisfy obligations under the terms of any severance or termination payments or benefits to any director, officer or employee Compensation and Benefit Plan in effect as of the Company or any of its Subsidiariesdate hereof, (iiC) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, for increases in the case of employees who compensation that are not officers, made in the ordinary course of business consistent with past practice (which shall include normal periodic performance reviews and related compensation and benefit increases), which increases their effective dates for corporate officers are set forth in Section 6.1(b)(v) of the Company Disclosure Letter and (iiiD) establishfor employment arrangements for or grants of awards, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding other than equity-based awards, to newly hired employees (ivhired in accordance with this paragraph) take in the ordinary course of business consistent with past practice; provided, however, that nothing in this clause (v) shall permit any action to accelerate that would otherwise be prohibited by clause (iv)(A) above;
(vi) except in the vesting ordinary course of business consistent with past practice or paymentin connection with the Assets Purchase, neither it nor any of its Subsidiaries shall enter into or terminate any Company Contract, or fund make any change in any of its Company Contracts;
(vii) neither it nor any of its Subsidiaries shall make any tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated without prior notice to Parent, except in the ordinary and usual course of business or in connection with the Assets Purchase;
(viii) neither it nor any of its Subsidiaries shall (A) acquire (by merger, consolidation or acquisition of stock or assets) or sell (by merger, consolidation or sale of stock or assets) any corporation, partnership or other business organization or division thereof or any assets in each case, which are material to the Company and its Subsidiaries taken as a whole other than in connection with the Assets Purchase, (B) incur any long-term indebtedness for money borrowed or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to, or investments in any other way secure person (other than a Subsidiary or Transferred Subsidiary of the paymentCompany or in connection with the Assets Purchase), in each case, other than (x) in the ordinary course of compensation business consistent with past practice or benefits under (y) any Benefit Planletter of credit entered into in the ordinary course of business consistent with past practice, (C) authorize any new capital expenditures which are, in the aggregate, in excess of $500,000 other than unforeseen capital expenditures that may be necessary to operate the business 45 consistent with past practice or (D) authorize any new commitments for taurolidine spending which are, in the aggregate, in excess of $500,000 (it being understood that commitments made prior to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations date hereof with respect to pre-clinical work or clinical studies are not covered by these limitations);
(ix) neither it nor any Benefit Plan of its Subsidiaries shall change in any material respect any of the accounting principles or to change the manner in which contributions to such plans are made or the basis on which such contributions are determinedpractices used by it, except as may be required by as a result of a change in SEC guidelines or GAAP; ;
(x) neither it nor any of its Subsidiaries shall pay, discharge or satisfy any liabilities or Obligations, other than any payment, discharge or satisfaction (A) in the ordinary course of business consistent with past practice, (B) in accordance with the terms of any such liabilities or Obligations, (C) which does not involve an amount in excess of $100,000, or (viD) forgive as set forth in Section 6.1(b)(x) of the Company Disclosure Letter;
(xi) neither it nor any loans of its Subsidiaries shall settle or compromise any litigation pending against the Company (whether or not commenced prior to directorsthe date of this Agreement) other than settlements or compromises of litigation or where the amount paid (less the amount reserved for such matters by the Company or covered by insurance) in settlement or compromise in each case does not exceed $100,000 or $500,000 in the aggregate;
(xii) neither it nor any of its Subsidiaries shall effectuate a "plant closing" or "mass layoff," as those terms are defined in WARN or any state or local law, officers affecting in whole or employees in part any site of employment, facility, operating unit or employee;
(xiii) neither it nor any of its Subsidiaries shall adopt a plan of complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization, merger or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the Mergers and the Assets Purchase);
(pxiv) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit neither it nor any of its Subsidiaries to take shall involuntarily separate any action that is reasonably likely to prevent Employee from employment with the consummation of the MergerCompany without due cause; orand
(sxv) agree, neither it nor any of its Subsidiaries shall authorize or commit enter into an agreement to do any of the foregoing.
(c) The provisions of this Section 6.1 notwithstanding, nothing in this Agreement shall be construed or interpreted to prevent the Company or any Subsidiary from (i) entering into the Asset Purchase Agreement and the Ancillary Agreements or complying with any of the terms thereof (ii) subject to Section 8.8, of the Asset Purchase Agreement making, accepting or settling intercompany advances to, from or with one another; (iii) subject to Section 6.21(b), causing any Subsidiary to pay or distribute to the Company all cash, money market instruments, bank deposits, certificates of deposit, other cash equivalents, marketable securities and other investment securities then owned or held by such Subsidiary; (iv) subject to Section 6.21(b), causing any Subsidiary which owns or holds any Purchased Assets to transfer such assets to the Company or its nominee prior to the Closing by means of a dividend, distribution in kind or other transfer without consideration; or (v) subject to Section 6.21(b), engaging in any other transaction incident to the normal cash management procedures of the Company and its Subsidiaries, including, without limitation, short-term investments in bank deposits, money market instruments, time deposits, certificates of deposit and bankers' acceptances and borrowings for working capital purposes and purposes of providing additional funds to Subsidiaries made, in each case, in the ordinary course of business, consistent with past practice; provided, however, that neither the Company nor any of its Subsidiaries may take any action pursuant to this Section 6.1(c) to the extent such action would have a material adverse effect on the Tax liability of the Company or any of its Subsidiaries without the prior written consent of Parent, which shall not be unreasonably withheld or delayed.
Appears in 1 contract
Sources: Agreement and Plan of Merger (MCC Acquisition Holdings Corp)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after Until the date hereof and prior to earlier of the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws Closing or as provided for in the ------------------ termination of this Agreement, each the Company shall, and shall cause its subsidiaries to, unless Purchaser shall otherwise consent in writing, conduct the operations of the Company Inkjet Business and its Subsidiaries shall conduct its business in the of O-Sub according to their respective usual, regular and ordinary course of business consistent with past practice and it shall use reasonable best efforts to preserve intact its their respective business organization organizations and relationships with third parties and goodwill, to keep available the services of its present their officers and employeesemployees and to maintain satisfactory relationships with customers, suppliers, distributors, brokers, sales agents and all other persons having business relationships with them, including through the payment of additional compensation reasonably acceptable to Purchaser to such distributors, brokers and sales agents reasonably calculated to maintain at least the current level of merchandising, distribution and shelving. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by earlier of the Closing or the termination of this Agreement, (B) as Parent may approve unless Purchaser shall otherwise consent in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letterwriting, the Company will not and will not permit its Subsidiaries towill:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issuenot pledge, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, licenseassign, guarantee transfer or encumbrance of, otherwise dispose of (by merger or otherwise) any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) the O-Sub Shares (other than pursuant - to the Loan and Pledge Agreement) or (ii) the Business Assets or Secondary -- Assets (including, without limitation, receivables, leasehold interests or third party licenses or assignments of Intellectual Property and including any sale leaseback transaction) except for the sale of inventory in the ordinary course of business;
(b) not effect any stock split, reverse stock split, stock dividend, subdivision, reclassification of the O-Sub Shares, or (ii) if consummation otherwise change the capitalization of the transactions contemplated O-Sub as it exists on the date hereof;
(c) preserve and maintain all the properties used in or relating to the Business Assets and Secondary Assets in a normal state of repair, order and condition, reasonable wear and use excepted;
(d) keep all the Business Assets and Secondary Assets insured (to the extent presently insured) against any loss, either by this Agreement or compliance by the Company with the provisions of this Agreement will conflict withfire, other casualty, or result in any violation or breach of, or default (with or without theft and give notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration Purchaser of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon involving any of the properties Business Assets or assets Secondary Assets if such loss is at least $50,000 or more and discuss with Purchaser whether the proceeds of any Company claim made in connection with the loss should be used to replace any property damage or Parent loss. Any proceeds not used to replace lost or any damaged property shall be for the account of its Subsidiaries under such Contract; provided, however, that Purchaser if the foregoing shall not prohibit entering into, modifying or renewing Inkjet Option is exercised and consummated at the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000Closing;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or not enter into any contract, agreement with respect or commitment relating to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide all or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) part of the Company Disclosure Letterbusiness conducted by O-Sub, incur any indebtedness for borrowed money the Business Assets or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, Secondary Assets except for indebtedness for borrowed money incurred contracts, agreements or commitments in the ordinary course of business consistent with past practices practice;
(f) maintain all the books, accounts and records relating to O-Sub and the Inkjet Business in the usual, regular and ordinary manner, on a basis consistent with prior years;
(g) promptly advise Purchaser in writing of any material adverse change in the business, operations, financial condition or prospects of O- Sub or the Inkjet Business or in the Business Assets, Secondary Assets or Business Liabilities;
(h) comply in all material respects with the provisions of all laws, regulations, ordinances and judicial decrees applicable to the conduct of O-Sub and the Inkjet Business;
(i) not to exceed $200,000 promptly notify Purchaser of the institution of any legal proceeding which may individually or in the aggregateaggregate have a material adverse effect on the business, (ii) in replacement operations, properties, financial condition or prospects of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than O-Sub and the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregateInkjet Business taken as a whole;
(j) except as set forth prosecute and maintain all Intellectual Property used or held for use in connection with the capital budgets set forth in Section 6.1(j) Inkjet Business or the business of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;O-Sub; and
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any other action that is reasonably likely to result in nor enter into any agreement which would have the effect of (i) frustrating the purpose of - this Agreement or (ii) preventing or disabling the Company from delivering -- the Business Assets, the Secondary Assets upon exercise of the conditions to Inkjet Option, delivering the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation O-Sub Shares upon exercise of the Merger; or
(s) agree, authorize Subsidiary Stock Option or commit to do any of the foregoingotherwise performing its obligations under this Agreement.
Appears in 1 contract
Sources: Asset and Subsidiary Stock Option Agreement (Raster Graphics Inc)
Interim Operations. The (a) Except as (x) required by applicable Law, (y) otherwise expressly contemplated or expressly required by this Agreement or (z) otherwise set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this AgreementTime, each of the Company shall, and shall cause its Subsidiaries shall to, (i) conduct its their business (A) in the ordinary course consistent and (B) in compliance in all material respects with past practice all applicable Laws and it shall all Material Contracts, and (ii) use their respective reasonable best efforts to preserve their business organizations intact its and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, landlords, creditors, licensors, licensees, officers, employees and business organization and relationships with third parties and keep available the services of its present officers and employees. associates.
(b) Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except as (A) as required by applicable Law, (B) otherwise expressly permitted contemplated or expressly required by this Agreement, (BC) as Parent may approve in writing (such approval not to be unreasonably withheld withheld, delayed or delayedconditioned) or (CD) as set forth in Section 6.1 6.1(b) of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(ai) adopt or propose any change in its articles certificate of incorporation or bylaws or other applicable governing instruments;
(bii) merge or consolidate the Company or any of its Subsidiaries with any other Person, Person or restructure, reorganize or completely or partially liquidate the Company or otherwise enter into any agreements or arrangements imposing material changes or restrictions on of its assets, operations or businessesSubsidiaries;
(ciii) acquire by merger, consolidation, acquisition of stock or assets (or otherwise) any corporation, partnership or other business organization or any property or assets other than the purchase of assets in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, ordinary course of business;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guaranty or encumbrance of, any shares of capital stock of the Company or any its SubsidiariesSubsidiaries (other than the issuance of Common Shares upon the exercise of Company Options, the vesting of Company RSUs or pursuant to the ESPP), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(fv) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-wholly owned Subsidiary of the Company) in excess of $50,000 25,000 in the aggregate, other than (A) lines of credit extended to the Company’s customers in the ordinary course of business consistent with past practices, (B) advancements of legal fees, costs and expenses to the Company’s or its Subsidiaries’ directors and officers pursuant to Existing Indemnification Obligations and (C) advances to employees in the ordinary course of business for travel and other out-of-pocket expenses;
(gvi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-wholly owned Subsidiary to the Company or to any other direct or indirect wholly-wholly owned Subsidiary) or enter into any agreement with respect to the voting of such its capital stock;
(hvii) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such its capital stock, except stock (other than the acquisition of any Common Shares tendered by current or former employees or directors in accordance order to pay Taxes in connection with cashless the exercise provisions of rights granted prior to Company Options or the date hereof under the vesting of Company Stock PlansRSUs);
(iviii) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, prepay or incur any indebtedness for borrowed money or guarantee such indebtedness of another PersonPerson (other than a wholly owned Subsidiary of the Company), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred under the Company Credit Agreements in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregatepractices;
(jix) except as set forth in the current capital budgets forecast set forth in Section 6.1(j6.1(b)(ix) of the Company Disclosure Letter and consistent therewithLetter, make or authorize any capital expenditure expenditures in excess of $200,000 50,000 in the aggregate during any 12 month periodaggregate;
(kx) make any material changes with respect to any method of Tax or financial accounting policies or procedures, except as required to comply with, by changes in GAAP or to comply with changes in, GAAPLaw or by a Governmental Entity;
(lxi) other than in the ordinary course of business and subject to Section 6.15, settle or compromise any litigation litigation, audit, claim or other proceedings before a Governmental Entity for an amount action against the Company or any of its Subsidiaries in excess of $200,000 15,000 individually or in any obligation matter that would materially interfere with the Company’s operations or liability of the Company in excess of such amountbusiness;
(mxii) makeother than in the ordinary course of business or to the extent required by Law, adopt or change make any material Tax election election, file any material amended Tax Return, settle or compromise any material Tax accounting methodliability, enter into any closing agreement with respect to any material Tax or fail surrender any right to timely (taking into account all applicable extensions) file all claim a material Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Daterefund;
(nxiii) other than pursuant to existing obligations under any Contracts in effect as of the date hereof, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, with a value in excess of $50,000 in the aggregate, except for (A) sales or rental and non-exclusive licenses of inventory products and services of the Company and its Subsidiaries in the ordinary course of business, sales (B) transfers among the Company and its wholly owned Subsidiaries, (C) any pledges of assets required by the Company Credit Agreements and (D) dispositions to customers of obsolete assets and salesor slow-moving inventory, leases, licenses equipment or other dispositions of assets with a fair market value not in excess of $250,000 that are substantially reserved against in the aggregate, other than pursuant to Contracts Company’s financial statements filed in effect the Company Reports prior to the date of this Agreementhereof;
(oxiv) except as required pursuant to existing written, binding agreements obligations under any Contracts or policies Benefit Plans in effect prior to as of the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Lawhereof, (iA) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer consultant or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officersmanagement-level employees, in the ordinary course of business consistent with past practice practices, (iiiB) establishincrease in any manner the compensation or bonus of, adopt, or make or amend or terminate in any respect any equity awards under any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or paymentto, or fund grant any bonuses to, any director, consultant or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees employee of the Company or any of its Subsidiaries, except, in the case of employees who are not management level employees of the Company in the ordinary course of business consistent with past practices, (C) establish, adopt, terminate or amend any Benefit Plan (other than as may be required under Law or routine changes to welfare plans) or accelerate the vesting of any compensation for the benefit of any Person, or (D) establish, adopt, enter into or amend any collective bargaining agreement;
(pxv) license any Intellectual Property other than in the ordinary course of business;
(xvi) (A) disclose any confidential information relating to any material Intellectual Property, except pursuant to the issuance of a patent or subject to a confidentiality agreement, or (B) allow any lapse or abandonment of any material Intellectual Property, or any registration or grant thereof, or any application related thereto to which, or under which, the Company or any Subsidiary has any ownership rights;
(xvii) enter into any arrangements relating to any royalty or similar payment based on the revenues, profits or sales volume of the Company or any Subsidiary, whether as part of the terms of the capital stock of the Company or any Subsidiary or by any separate agreement;
(xviii) enter into any transactions with any Affiliate of the Company (other than any of its Subsidiaries) other than the agreements and transactions expressly contemplated by this Agreement;
(xix) enter into any Material Contracts containing covenants of the Company or any of its Subsidiaries purporting to limit in any material respect any line of business, industry or geographical area in which the Company or its Subsidiaries may operate or granting material exclusive rights to the counterparty thereto;
(xx) take any action (or omit to take any action) if such action that is (or omission) would, or would be reasonably likely to like to, result in any representation or warranty of the conditions to the Merger Company set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Mergerthis Agreement becoming untrue; or
(sxxi) agree, authorize or commit to do any of the foregoing.
(c) Neither Parent nor Merger Sub shall knowingly take or permit any of their Affiliates to take any action that is reasonably likely to prevent or delay the consummation of the Merger or result in any representation or warranty of Parent or Merger Sub set forth in this Agreement to become untrue.
(d) Nothing contained in this Agreement is intended to give Parent or Merger Sub, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations. Prior to the Effective Time, each of Parent and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
(e) Notwithstanding anything herein to the contrary, neither the Company nor any of its Subsidiaries shall be permitted to make or commit to make the payment set forth in Section 5.1(r) of the Company Disclosure Letter.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior 14.1 Standard of Care - Subject to the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for additional restrictions set forth in this AgreementSection 14.1, each Seller shall operate the Seller-operated Assets in accordance with all applicable laws, using the standard of the Company care as an ordinarily prudent operator and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice practices until Closing, or such later time as any applicable joint operating agreement may require, when such operation shall be turned over to, and it become the responsibility of, Buyer. During the period from the Execution Date to Closing, Seller shall:
(i) to the extent the operator of the Assets allows, permit Buyer to have access for inspection as to any of the Assets;
(ii) except for emergency action taken in the face of risk to life, property or the environment, shall not, without prior written consent of Buyer (which shall not be unreasonably withheld) approve or authorize any AFEs or capital expenditures over One Hundred Thousand Dollars ($100,000) net to the interest of Seller which is received by Seller with respect to any Assets;
(iii) not incur costs for discretionary expenditures for operations in excess of One Hundred Thousand Dollars ($100,000) net to the interest of Seller for which AFEs are not prepared;
(iv) operate, or if Seller is not the operator, use reasonable efforts to preserve intact its business organization ensure that the operator operates the Assets and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change produces Hydrocarbons therefrom in its articles ordinary course of incorporation or bylaws or other business and in accordance with applicable governing instrumentsindustry standards and the terms and conditions of all applicable Contracts, laws and regulations;
(bv) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issuenot transfer, sell, pledge, dispose of, grant, transferhypothecate, encumber, abandon or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, otherwise dispose of any shares of capital stock portion of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares Assets (other than the sale of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts Hydrocarbons in the ordinary course of business to or as required in connection with the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost exercise by third-parties of less than $200,000Preferential Purchase Rights);
(evi) except pursuant to Contracts assist the Buyer (without incurring any third party expenses) in effect prior preserving the present relationships related to the date of this AgreementAssets with Persons having significant business relations therewith, create such as suppliers, customers, brokers, agents or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000otherwise;
(fvii) make take any loans, advances or capital contributions and all actions necessary to or investments in any Person (other than ensure that the Company or any direct or indirect wholly-owned Subsidiary Assets are free and clear of the Company) in excess all liens and encumbrances as of $50,000 in the aggregateClosing;
(gviii) declarenot waive, set asidecompromise or settle any material right or claim if such waiver, make compromise or pay any dividend settlement would adversely affect the use, ownership or other distribution, payable in cash, stock, property or otherwise, with respect to operation of any of its capital stock the Assets in any material respect, and
(ix) maintain (or cause to be maintained) insurance coverage on the capital stock Assets in the amounts and of its Subsidiaries (except the types presently in force and effect and not make any election to be excluded from any coverage provided by an operator for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stockjoint account under an applicable joint operating agreement;
(hx) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, not incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting methodtake, or fail to timely (taking into account all applicable extensions) file all Tax Returns required take, any actions that would cause a lien or encumbrance to be filedarise or exist on the Assets or otherwise allow a lien to attach to, and pay all Taxes required to be paidor encumber, on the Assets or before the Closing Dateany thereof;
(nxi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory pay royalties in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect same manner as royalties were paid for such Asset prior to the date of this Agreement;Effective Time; and
(oxii) except as required pursuant cause the Assets to existing written, binding agreements or policies be maintained in effect prior to accordance with the date of this Agreement terms and set forth in Section 5.1(h) conditions of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business Contracts and applicable laws and regulations and consistent with past practice practices, (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations and consult with Buyer with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoingsame.
Appears in 1 contract
Sources: Purchase and Sale Agreement
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time or earlier termination of this Agreement (unless Parent Acquiror shall otherwise approve in advance in writing, which approval shall not be unreasonably withheld or delayed) and except as otherwise expressly contemplated by this Agreement or required by applicable Laws or as provided for in this AgreementLaws, each the business of the Company it and its Subsidiaries shall conduct its business be conducted in the ordinary course consistent with past practice course, and it and its Subsidiaries shall use all commercially reasonable efforts to preserve their business organizations intact its and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, key employees and business organization and relationships with third parties associates and keep available the services of its and its Subsidiaries’ present directors, officers and key employees. Subject to the other provisions of this Section 6.01, during the period from the date of this Agreement to the Effective Time or earlier termination of this Agreement, the Company shall use all reasonable best efforts to continue to qualify as a REIT for U.S. federal income tax purposes. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective TimeTime or earlier termination of this Agreement, except (A) as otherwise expressly permitted required by this Agreement, (B) as Parent Acquiror may approve in advance in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 6.01 of the Company Disclosure Letter, the Company it will not and will not permit its Subsidiaries to:
(ai) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instrumentsinstruments (whether by merger, consolidation or otherwise);
(bii) merge or consolidate the Company itself or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesliquidate;
(ciii) acquire, purchase or lease (in each case, whether by merger, consolidation or by any other than in accordance with benefits outstanding prior to manner) any business or Person or, outside the date hereof under the Company Stock Plansordinary course of business, any assets (including securities);
(iv) issue, sell, pledge, dispose of, grant, transfer, encumberdeliver or amend, or authorize or propose the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee delivery or encumbrance amendment of, any shares of its capital stock or of any of its Subsidiaries (other than the Company issuance of shares by its wholly owned Subsidiary to it or any another of its wholly owned Subsidiaries), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, in each case other than Common Shares issuable pursuant to Company Options outstanding on the date hereof under the Stock Plans or under the ESPP;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(gv) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-wholly owned Subsidiary to the Company it (other than Angle Capital Holdings, Inc.) or to any other direct or indirect wholly-wholly owned Subsidiary) Subsidiary or enter into any agreement with respect distributions made pursuant to the voting of such capital stockSection 6.01(b)(i), if applicable);
(hvi) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such its capital stock, except stock (it being understood that the net settlement of Company Awards including any deemed purchase of Common Shares in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plansconnection therewith shall not be covered by this clause (vi));
(ivii) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities (including without limitation securities issued in any form, debt or warrants otherwise, in connection with securitization transactions) or other rights to acquire any of its debt security securities or of any of its Subsidiaries, other than (A) advances in the ordinary course pursuant to warehouse lines of credit or other interim financing arrangement set forth in Section 6.01(a)(vii) of the Company Disclosure Letter, or any renewal or replacement thereof, including any renewal or replacement of the existing warehouse line of credit with ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, N.A. scheduled to expire August 23, 2006, but subject to the restrictions set forth in Section 6.14 of this Agreement, (B) the issuance of the amount necessary for the Company to maintain its status as a REIT, which amount the Company currently believes to be $1.1 billion, in asset-backed securities in owner trust securitizations, subject to the requirements set forth in Section 6.01(a)(vii) of the Company Disclosure Letter, provided that such securitizations will be structured as one or more “taxable mortgage pools” within the meaning of Section 7701(i) of the Code and all of the retained interests with respect thereto will be retained by the Company or a QRS of the Company (other than any interests with respect to which the issuer of such interest has obtained an opinion that such interest constitutes indebtedness for U.S. federal income tax purposes), and (C) borrowings between or among the Company and any of its wholly-owned Subsidiaries or between or among the wholly-owned Subsidiaries;
(viii) except as contemplated by the capital expenditure budget for the Company or any of its Subsidiaries that is attached to Section 6.01(a)(viii) of the Company Disclosure Letter, make or authorize any material capital expenditure;
(ix) enter into any of the following (each, a “Material Contract”):
(A) any lease of any real property or any lease of personal property providing for annual rentals of $500,000 or more;
(B) any material partnership, joint venture or other similar agreement or arrangement;
(C) any Contract required to be filed as an exhibit to the Company’s Annual Report on Form 10-K pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act;
(D) any non-competition Contract or other Contract that (1) purports to limit in any material respect either the type of business in which the Company or its Subsidiaries (or, after the Effective Time, Acquiror or its Subsidiaries) may engage or the manner or locations in which any of them may so engage in any business or any Person with whom the same might otherwise compete, (2) could require the disposition of any material assets or line of business of the Company or its Subsidiaries or, after the Effective Time, Acquiror or its Subsidiaries, (3) grants “most favored nation” or exclusivity status or rights that, following the Merger, would apply to Acquiror and its Subsidiaries, including the Company and its Subsidiaries or (4) prohibits or limits the rights of the Company or any of its SubsidiariesSubsidiaries to make, except for indebtedness for borrowed money incurred sell or distribute any products or services in any manner the ordinary course same shall see fit, or use, transfer, license, distribute or enforce any of business consistent with past practices their respective Intellectual Property rights;
(iE) any Contract to which the Company or any of its Subsidiaries is a party containing a standstill or similar agreement pursuant to which the party has agreed not to exceed $200,000 in acquire assets or securities of the aggregate, other party or any of its Affiliates (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial other than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by two such agreements that the Company terminated); or
(F) any Contract between the Company or any of indebtedness of wholly-owned its Subsidiaries and any director or officer of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 any Person beneficially owning five percent or more of notional debt in the aggregateoutstanding Shares;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(kx) make any material changes with respect to accounting policies or procedures, except as required to comply with, by changes in applicable generally accepted accounting principles or to comply with changes in, GAAPRegulation S-X under the Securities Act;
(lxi) settle or offer or propose to settle (A) any litigation other Proceeding before an arbitrator or other proceedings before a Governmental Entity for an amount in excess of $200,000 100,000 individually or $500,000 in the aggregate, (B) any obligation or liability Proceeding described in Section 6.01(a)(xi)(B) of the Company in excess Disclosure Letter, other than as described therein, (C) any stockholder Proceeding against the Company or any of such amountits officers or directors or (D) any Proceeding that relates to the transactions contemplated hereby;
(mxii) makeother than in the ordinary course of business, adopt amend, modify or terminate any Material Contract, or cancel, modify or waive any debts or claims held by, or material rights or obligations under any Material Contract of, the Company or any of its Subsidiaries, except as otherwise permitted by this Section 6.01(a);
(xiii) make or change any material Tax election unless such election is (A) required by Law, (B) reasonably determined by the Company upon good faith consultation with Acquiror to be necessary or Tax accounting methodadvisable to preserve the status (1) of the Company as a REIT or (2) of any Subsidiary of the Company as a partnership for federal income tax purposes, or as a qualified REIT subsidiary under Section 856(i) of the Code or a taxable REIT subsidiary under Section 856(l) of the Code, as the case may be, or (C) required pursuant to the terms of a securitization of which the Company or any of its Subsidiaries is the sponsor (in which case, the Company shall make such election in a timely manner and shall inform Acquiror of such election);
(xiv) take any action, or fail to timely take any action, which would reasonably be expected to cause (taking into account all applicable extensionsA) file all Tax Returns required the Company to fail to qualify as a REIT, or (B) any of its Subsidiaries to cease to be filedtreated as a partnership for federal income tax purposes, and pay all Taxes required to be paidas a qualified REIT subsidiary under Section 856(i) of the Code or as a taxable REIT subsidiary under Section 856(l) of the Code, on or before as the Closing Datecase may be;
(nxv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any of its material assets, product lines or businesses or of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except any such transactions among it and its wholly owned Subsidiaries and except for sales Liens pursuant to the Existing Financing Facilities or rental other credit facilities or new lines of inventory credit or credit facilities permitted under this Section 6.01 or the sale, financing or securitization of mortgages, mortgage servicing rights and receivables arising from Servicing Advances in the ordinary course of business;
(xvi) other than in the ordinary course of business, sales of obsolete assets and sales(A) grant any severance or termination pay, leases(B) increase or accelerate the compensation or benefits payable under any existing severance or termination pay agreement or arrangement, licenses (C) enter into any employment, consultancy, bonus, severance, termination pay, retirement or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregatesimilar agreement or arrangement (or materially amend any such existing agreement or arrangement), other than pursuant to Contracts in effect prior to the date of this Agreement;
(oD) establish, adopt or amend (except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, incentive compensation, equity compensation or other material benefit plan or arrangement, (iE) make any material increase in compensation or benefits, (F) hire or retain (or terminate the employment or other service of) any employee or independent contractor with a base salary or annual compensation, as applicable, over $200,000, (G) grant any equity compensation award (whether in the form of options, restricted stock, restricted units or provide otherwise) or (H) renew any severance or termination payments or benefits to any directorpreviously terminated equity compensation plan (including the ESPP), officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, exceptthan, in the case of employees who are not officersclauses (a), (b), (c), (e) or (f), any action that is in the ordinary course of business; provided, however, that in no event shall the Company or any Subsidiary take any of the foregoing actions for the benefit of any participant in the Company's 2005 Change-in-Control Plan.
(xvii) (A) enter into any derivative contract or instrument, other than for bona fide hedging purposes in the ordinary course of business consistent with past practice , or (iiiB) establish, adopt, amend fail to follow the Company’s existing policies or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations procedures with respect to any Benefit Plan or managing its exposure to change the manner in which contributions to such plans are made or the basis on which such contributions are determinedinterest rate risk, except as may be required contemplated by GAAPSection 6.13;
(xviii) amend any material Tax Return; settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to material Taxes; fail to timely file all Tax Returns; fail to timely pay any material Taxes; or (vi) forgive any loans to directors, officers or employees of the Company or change any of its Subsidiariesmethods of reporting income or deductions for U.S. federal income tax purposes from those employed in the preparation of its U.S. federal income Tax Return for the taxable year ended December 31, 2004;
(pxix) take any action or omit to take any action that is would reasonably likely be expected to result in any of the conditions to the Merger set forth in Article VII 7 not being satisfied;
(qxx) take acquire (however structured) “mortgage servicing rights” (each, an “MSR”) for a purchase price of more than $15 million in any action one transaction or $50 million for all such purchases in the aggregate; provided that would violate all such acquisitions shall also be subject to the CIArequirements set forth in Section 6.01(a)(xx) of the Company Disclosure Letter;
(rxxi) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent acquire (however structured) loans through the consummation conduit program of the MergerCompany and it Subsidiaries (collectively, the “Conduit Loans”) with an aggregate initial principal amount in excess of $1.065 billion; provided that all such acquisitions shall also be subject to the requirements set forth in Section 6.01(a)(xxi) of the Company Disclosure Letter; or
(sxxii) agree, authorize or commit to do any of the foregoing.
(i) Notwithstanding anything to the contrary in this Agreement, prior to the Effective Time, the Company may declare one or more dividends to its stockholders distributing (in the aggregate) cash in an amount of up to 95% of the Company’s estimated “real estate investment trust taxable income” (as such term is used in Section 857 of the Code) for the period beginning July 1, 2006 and ending on the earlier of the Effective Time or December 31, 2006, determined without regard to any tax deduction that may be available with respect to the payment or vesting of any restricted stock units or any payment to Employees or directors of the Company or of any of its Subsidiaries, whether pursuant to an employment agreement, a change in control plan, or otherwise, to the extent that such payment or vesting occurs as a result of the transactions contemplated by this Agreement. The amount of any such dividend or dividends shall be initially proposed by the Company, but shall be subject to the mutual agreement of the Company and Acquiror, provided that the Company and Acquiror (and their authorized representatives) agree to consult in good faith with respect to the determination of the amount of such dividend or dividends, and shall use their commercially reasonable best efforts to agree on such amount as quickly as is practicable. Any dividends declared pursuant to this Section 6.01(b)(i) shall be paid by the Company prior to the Effective Time.
(ii) In addition, the Company agrees that, on its U.S. federal income tax return (and any corresponding state or local income tax returns) for its taxable year ending December 31, 2005, pursuant to Section 858 of the Code the Company shall elect to designate such portion of the first regular quarterly dividend paid on the Common Shares in 2006 as paid with respect to such taxable year as is necessary to permit the Company to satisfy the minimum distribution requirement of Section 857(a) with respect to such taxable year (the “2005 Throwback Amount”), provided that the Company and Acquiror (and their authorized representatives) shall consult in good faith with respect to the determination of the 2005 Throwback Amount, and the Company's determination of the 2005 Throwback Amount shall be subject to the written approval of Acquiror (which approval shall not be unreasonably withheld or delayed).
(c) Acquiror covenants and agrees that, after the date hereof and prior to the Effective Time or earlier termination of this Agreement (unless the Company shall otherwise approve in writing (which approval shall not be unreasonably withheld or delayed), and except as otherwise expressly contemplated by this Agreement or as required by applicable Law), it will not and will not permit any of its Subsidiaries to take any action or omit to take any action that would reasonabl
Appears in 1 contract
Sources: Merger Agreement (Saxon Capital Inc)
Interim Operations. The Company covenants and Seller agrees as to itself and its Subsidiaries that, that after the date hereof Execution Date and prior to the Effective Time Closing Date (unless Parent Buyer shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this AgreementLaw, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it Seller shall use its commercially reasonable efforts to preserve intact (i) maintain in effect all foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations; and (ii) continue to provide customer support and service to its business organization and relationships with third parties and keep available customers in the services of its present officers and employeesOrdinary Course. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement Execution Date until the Effective TimeClosing, except (A) as otherwise expressly permitted contemplated by this Agreement, ; (B) as Parent Buyer may approve consent in writing (such approval which consent shall not to be unreasonably withheld or delayed; provided that Buyer shall be required to respond to Seller within two (2) Business Days after receipt of written notice requesting approval from Seller with respect to any such action, and if Buyer does not respond within such time period, such lack of response shall be deemed to constitute written approval of Buyer with respect to any such action); (C) as is required by applicable Law or Governmental Authorities; or (CD) as set forth in Section 6.1 of the Company Disclosure LetterSchedule 7.5, the Company Seller will not and will not permit its Subsidiaries tonot:
(a) adopt or propose any amendment or change in its articles certificate of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate liquidate;
c) sell, lease or otherwise transfer, or create or incur any Encumbrance other than a Permitted Encumbrance on, any Acquired Assets;
d) modify in any respect any of the Transferred Contracts or waive any failure to comply with any provision thereunder by any of the other parties thereto;
e) enter into any agreements agreement or arrangements imposing arrangement that is material changes to the Acquired Assets, or restrictions on its assets, operations that materially increases Seller’s actual or businessescontingent liabilities and obligations beyond cash available to satisfy them;
f) fail to maintain the Tangible Assets in the Ordinary Course;
g) take (cor omit to take) other than in accordance with benefits outstanding prior any action that adversely affects, or could reasonably be expected to adversely affect, any rights of Seller to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumberSeller Intellectual Property Assets, or authorize abandon or permit to lapse any rights of Seller to the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its SubsidiariesSeller Intellectual Property Assets;
h) settle, or securities convertible offer or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind propose to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, settle (i) except in the ordinary course of businessany litigation, investigation, arbitration, proceeding or other claim involving or against Seller or (ii) if consummation of any litigation, arbitration, proceeding or dispute that relates to the transactions contemplated by this Agreement hereby or compliance by the Company Other Agreements, in either case with any result which adversely affects the Business or Acquired Assets;
i) sell or offer to sell any Products on terms that are not consistent with Seller’s Ordinary Course or at any price that is less than such Product’s list price, subject to discounts consistent with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000Ordinary Course;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting that would make any representation or paymentwarranty of Seller hereunder, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely necessary to result prevent any representation or warranty of Seller hereunder from being, inaccurate in any respect at, or as of any time before, the conditions to the Merger set forth in Article VII not being satisfied;
(qClosing Date; or k) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize agree or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement) and except as required by this Agreement or applicable Laws or as provided for in this AgreementLaws, each the business of the Company it and its Subsidiaries shall conduct its business be conducted in the ordinary and usual course and, to the extent consistent with past practice therewith, it and it its Subsidiaries shall use their respective commercially reasonable efforts to preserve their business organizations intact its and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, franchisees, lessors, employees and business organization and relationships with third parties associates and keep available the services of the present employees and agents of the Company and its present officers and employeesSubsidiaries. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted required by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(ai) adopt or propose any change in its articles of incorporation or bylaws by-laws or other applicable governing instruments;
(bii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(ciii) acquire assets outside of the ordinary course of business from any other Person in any transaction or series of related transactions, other than (A) acquisitions pursuant to Contracts in accordance effect as of the date of this Agreement or (B) otherwise, in compliance with benefits outstanding the latest annual plan furnished to Parent prior to the date hereof under of this Agreement (the Company Stock Plans, “Budget”);
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its SubsidiariesSubsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary, the issuance of shares of the Company pursuant to the standby commitment stock options granted to certain members of the JP Acquisition Fund Group, or the issuance of shares of the Company pursuant to Company Options or Company Awards existing on the date hereof), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(dv) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000100,000;
(fvi) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 other than as set forth in the aggregateBudget;
(gvii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such its capital stock;
(hviii) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such its capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(iix) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money (i) guarantees of franchisee obligations incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregatebusiness, (ii) indebtedness incurred in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company Company, or (iv) interest rate swaps on customary commercial terms consistent otherwise, in compliance with past practice and not to exceed $250,000 of notional debt in the aggregateBudget;
(jx) except as set forth in compliance with the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewithBudget, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month periodexpenditure;
(kxi) except with the prior written consent of Parent, which consent shall not unreasonably be withheld, delayed or conditioned, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(xii) make any material changes with respect to accounting policies or procedures, except as required to comply with, by changes in applicable generally accepted accounting principles or to comply with changes in, GAAPby applicable Law;
(lxiii) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 100,000 or any obligation or liability of the Company in excess of such amount;
(mxiv) makeamend, adopt modify or terminate any Material Contract, or cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $100,000;
(xv) make or change any material Tax election election, file any amended Tax Return, enter into any closing agreement, waive or extend any statute of limitation with respect to Taxes, settle or compromise any Tax accounting methodliability, claim or fail assessment, surrender any right to timely (taking into account all applicable extensions) file all claim a refund of Taxes or take any other similar action relating to the filing of any Tax Returns required to be filed, and pay all Taxes required to be paid, on Return or before the Closing Datepayment of any Tax;
(nxvi) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines material assets or any businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries;
(xvii) (i) sell, assign, or grant any security interest in any Owned Intellectual Property, (ii) grant to any third party any license in, to or under any Company Intellectual Property, except for sales or rental of inventory pursuant to non-exclusive licenses entered into with franchisees in the ordinary course of businessbusiness consistent with past practice, sales (iii) develop, create, or invent any Intellectual Property jointly with any third party, (iv) disclose or allow to be disclosed to any Person not an Employee any Company Intellectual Property not heretofore a matter of obsolete assets and salespublic knowledge, leasesor (v) permit any item of Owned Intellectual Property to lapse or to be abandoned, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior dedicated to the date public, or disclaimed, and the Company and its Subsidiaries shall perform all applicable filings, recordings, and other acts, and pay all required fees and taxes, to maintain and protect its interest in each and every item of this AgreementCompany Intellectual Property;
(oxviii) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h5.1(h)(i) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(pxix) fail to renew leases of real property that expire prior to the Effective Time, in accordance with their respective terms;
(xx) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII VIII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(sxxi) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any written or oral communications to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the transactions contemplated by this Agreement, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
Appears in 1 contract
Interim Operations. The (a) Except as set forth in the corresponding section of the Company Disclosure Schedule (including the capital expenditure, spending and other budgets contained therein) or otherwise as expressly provided hereby, subject to applicable law, the Company covenants and agrees as to itself and its Subsidiaries that, after from the date hereof and prior to of this Agreement until the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this AgreementTime, each the business of the Company it and its Subsidiaries shall conduct its business be conducted only in the ordinary course of business consistent with past practice and, to the extent consistent therewith, it and it its Subsidiaries shall use their respective reasonable best efforts to preserve intact its business organization intact and relationships maintain its existing relations and goodwill with third parties Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of the present employees and agents of the Company and its present officers and employeesSubsidiaries. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:to (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed):
(ai) adopt or propose any change in its articles certificate of incorporation or bylaws by-laws (or other applicable similar governing instrumentsdocuments);
(bii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company that are not obligors or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesguarantors of third party indebtedness;
(ciii) acquire assets from any other Person with a value or purchase price in the aggregate in excess of $500,000 other than acquisitions pursuant to Contracts to the extent in accordance with benefits outstanding effect immediately prior to the execution of this Agreement (other than any such Contract that is a Significant Contract but is not listed on Section 5.11 of the Company Disclosure Schedule or a true and correct copy of which was not previously made available to Parent prior to the date hereof under hereof);
(iv) other than pursuant to Contracts to the extent in effect as of immediately prior to the execution of this Agreement and set forth in Section 7.1(a)(iv) of the Company Disclosure Schedule, and other than the issuance of shares of Common Stock Plansupon the exercise of outstanding Company Options or Company Warrants and pursuant to other Stock-Based Awards granted under other Company equity-based compensation plans, in each case, outstanding on the date hereof, disclosed pursuant to Section 5.2 and in accordance with their terms, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its SubsidiariesSubsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(dv) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value that is material, individually or in excess of $50,000the aggregate, to the Company;
(fvi) other than pursuant to Contracts to the extent in effect as of immediately prior to the execution of this Agreement and set forth in Section 7.1(a)(vi) of the Company Disclosure Schedule, make any loansloan, advances advance or capital contributions contribution to or investments investment in any Person (other than the Company or any direct or indirect a wholly-owned Subsidiary of the Company) in excess of $50,000 10,000 in the aggregate;
(gvii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid or other distributions by any direct or indirect wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly-owned SubsidiarySubsidiary of the Company and periodic dividends and other periodic distributions by non-wholly-owned Subsidiaries in the ordinary course of business consistent with past practice) or enter into any agreement with respect to the voting of such its capital stock;
(hviii) other than as required by Section 5.1(r), reclassify, combine, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such its capital stockstock except the acceptance of shares of Company Common Stock as payment of the exercise price of stock options or for withholding taxes incurred in connection with the exercise of Company Stock Options or the vesting of restricted stock or other Company Stock-Based Awards, except in each case in accordance with past practice and the terms of the applicable award;
(ix) waive any stock repurchase rights; accelerate, amend or change the period of exercisability of options or restricted stock, or reprice options granted under any employee, consultant, director or other stock plans; or authorize cash payments in exchange for any options granted under any of such plans (other than pursuant to cashless exercise provisions of rights granted prior to in effect on the date hereof under the Company Stock Planshereof);
(ix) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, or enter into any "keep well" or other agreement to maintain any financial statement condition, except, in the case of each of the foregoing, arrangements by and between any direct or indirect wholly-owned Subsidiary of the Company and the Company or any other direct or indirect wholly-owned Subsidiary of the Company;
(xi) make or authorize any capital expenditure, except for indebtedness for borrowed money incurred as disclosed in Section 7.1(a) of the Company Disclosure Schedule, or any operating expenditure other than in the ordinary course of business and consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital operating budgets set forth disclosed in Section 6.1(j7.1(a) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month periodSchedule;
(kxii) make other than as otherwise permitted by this Agreement, enter into any changes with respect Contract that would have been a Significant Contract had it been entered into prior to accounting policies the execution of this Agreement;
(xiii) amend or proceduresmodify in any material respect, or terminate or waive any material right or benefit under, any Significant Contract;
(xiv) except as required to comply withby GAAP or the applicable Law, make any change in financial accounting methods, principles or to comply with changes in, GAAPpractices;
(lxv) settle any litigation or other proceedings before or threatened to be brought before a Governmental Entity for an amount in excess of $200,000 50,000 or which would be reasonably likely to have any obligation or liability adverse impact on the operations of the Company in excess or any of such amountits Subsidiaries or on any current or future litigation or other proceeding of the Company or any of its Subsidiaries;
(mxvi) makepay, adopt discharge, settle or change satisfy any material Tax election liabilities or Tax accounting methodobligations of any nature, other than any payment, discharge, settlement or fail to timely satisfaction (taking into account all A) required by applicable extensionsLaw, (B) file all Tax Returns required to be filedin the ordinary course of business or (C) in accordance with their terms, and pay all Taxes required to be paid, on of liabilities or before obligations recognized or disclosed in the Closing most recent financial statements (or the notes thereto) of the Company included in the Company Reports or incurred since the Audit Date;
(nxvii) transferwaive the benefits of, agree to modify in any manner, terminate, release any person from, or knowingly fail to use reasonable efforts to enforce, the confidentiality or nondisclosure provisions of any Significant Contract to which the Company or any of its Subsidiaries is a party or of which the Company or any of its Subsidiaries is a named third party beneficiary;
(xviii) cancel or fail to use commercially reasonable efforts to renew, without reasonable substitutes, any insurance policy naming the Company or any of its Subsidiaries as a beneficiary or loss payee;
(xix) sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses assets of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, Subsidiaries except for ordinary course sales of products or rental of inventory services provided in the ordinary course of businessbusiness consistent with past practice or obsolete assets, sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date execution of this AgreementAgreement (other than any such Contract that is a Significant Contract but is not listed on Section 5.11 of the Company Disclosure Schedule or a true and correct copy of which was not previously made available to Parent prior to the date hereof);
(oxx) except as required pursuant to existing written, binding agreements or policies Benefit Plans in effect prior to the date execution of this Agreement and set forth in Section 5.1(hSections 5.13 or 7.1(a)(xx) of the Company Disclosure LetterSchedule, or as otherwise required by Law or with respect to new hires below the officer level (except with respect to clause (6) below, which will be applicable Lawto all new hires), (i1) grant enter into any new employment or provide compensatory agreements with any severance officer, employee or termination payments or benefits to any director, officer or employee director of the Company or any of its Subsidiaries (including entering into any bonus, severance, change of control, termination, reduction-in-force or consulting agreement or other employee benefits arrangement or agreement pursuant to which such person has the right to any form of compensation from the Company or any of its Subsidiaries); PROVIDED that, with respect to any new officer that will replace a former officer, the overall compensatory package of such officer is no less favorable (iiin terms of compensation, severance, duration and other matters) than the former officer whom the new officer will replace; (2) promote any employee, other than promotions on terms that are no more favorable (in terms of compensation, severance, duration and other matters) than the terms upon which any employee previously serving in the applicable capacity was entitled; or (3) increase the compensationcompensation or employee benefits of any officer, bonus or pensionemployee, welfare, severance or other benefits of, pay any bonus toconsultant, or make any new equity awards to any director, officer or employee director of the Company or any of its Subsidiaries, except, in the case of with respect to employees who are not officersonly, for increases in the ordinary course of business consistent with past practice (including timing of increases); or (4) hire any officer or director, except in connection with the replacement of an officer whose employment has terminated, PROVIDED the overall compensatory package of such officer is no less favorable (iiiin terms of compensation, severance, duration and other matters) establish, adopt, than the terminated officer; or (5) adopt or amend or terminate any Benefit Plan in any respect that would materially increase the cost of such Benefit Plan to the Company, or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or paymentpayment under, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi6) forgive agree or commit to provide severance benefits to any loans to directorsnewly hired officer, officers employee or employees director of the Company or any of its SubsidiariesSubsidiaries other than as required by Benefit Plans set forth on Section 5.13 of the Company Disclosure Schedules;
(pxxi) take engage in the conduct of any action or omit to take any action that is reasonably likely to result in any new line of business, other than as expressly permitted by Section 7.1(a)(iii) of the conditions to Company Disclosure Schedule (other than any new product or service offerings reflected on the Merger set forth in Article VII not being satisfiedcapital expenditure, spending and other budgets);
(qxxii) take any action that would violate manage working capital other than in the CIA;
(r) knowingly take or permit any ordinary course of its Subsidiaries to take any action that is reasonably likely to prevent business consistent with past practice, including extending the consummation payment of accounts payable, accelerating the Mergercollection of accounts receivable; or
(sxxiii) agree, authorize resolve or commit to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Register Com Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writingwriting (such approval not to be unreasonably withheld or delayed), and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws or as provided for in this AgreementLaws, each the business of the Company it and its Subsidiaries shall conduct its business be conducted in the ordinary and usual course and, to the extent consistent with past practice therewith, it and it its Subsidiaries shall use their respective reasonable best efforts to preserve their business organizations intact its and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business organization and relationships with third parties associates and keep available the services of its and its Subsidiaries’ present officers employees and employeesagents. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted required or expressly contemplated by this Agreement, (B) as reasonably responsive to a requirement of applicable Law or any Governmental Entity, (C) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (CD) as set forth in Section 6.1 6.1(a) of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(ai) adopt or propose any change in its articles certificate of incorporation or bylaws by-laws or other applicable governing instruments;
(bii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes with similar effect on the Company’s or restrictions on any of its Subsidiaries’ assets, operations or businesses;
(ciii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $10 million, other than acquisitions pursuant to Contracts in accordance with benefits outstanding prior to effect as of the date hereof under the Company Stock Plans, of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any of its SubsidiariesSubsidiaries (other than the issuance of shares by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary and other than shares issuable in accordance with existing rights under the Stock Plans or the Convertible Subordinated Debentures), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(dv) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries Encumbrance on any material assets of the Company or any of its Subsidiaries having a value in excess of $50,000Subsidiaries;
(fvi) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-wholly owned Subsidiary of the Company) in excess of $50,000 other than advances to suppliers and loans to employees and prospective employees in the aggregateordinary course of business consistent with past practice;
(gvii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-wholly owned Subsidiary to the Company or to any other direct or indirect wholly-wholly owned Subsidiary) or enter into any agreement with respect to the voting of such its capital stock;
(hviii) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such its capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(iix) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for (A) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (ix) not to exceed $200,000 50 million in the aggregate, aggregate or (iiy) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replacedmoney, (iiiB) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-wholly owned Subsidiaries of the Company or (ivC) interest rate swaps in respect of newly incurred indebtedness on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregatepractice;
(jx) except as set forth in the capital budgets set forth in Section 6.1(j6.1(a)(x) of the Company Disclosure Letter and consistent therewiththerewith in respect of the year ended December 31, 2006, make or authorize commit to make any capital expenditure in excess of (A) $200,000 20 million in the aggregate during any 12 month periodthe year ended December 31, 2006 and (B) $20 million in the aggregate in respect of each of the first two calendar quarters in the year ended December 31, 2007;
(kxi) enter into any Contract that would have been a Material Contract (other than under Section 5.1(j)(i)(D)) had it been entered into prior to this Agreement;
(xii) make any material changes with respect to accounting policies or procedures, except as required to comply with, by changes in GAAP or to comply with changes in, GAAPinterpretations thereof;
(lxiii) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 3 million individually (or $20 million in the aggregate) or any obligation or liability of the Company in excess of such amountamounts;
(mxiv) makeamend or modify in any material respect or terminate any Material Contract, adopt or cancel or modify in any material respect or waive any debts or claims held by it or waive any rights having in each case a value in excess of $3 million individually (or $20 million in the aggregate);
(xv) make any material Tax election, settle any Tax claim or change any material Tax election or method of Tax accounting method, in excess of $10 million individually (or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before $20 million in the Closing Dateaggregate);
(nxvi) transfer, sell, leasesuffer an Encumbrance, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of lease any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales in connection with services provided or rental of inventory products sold in the ordinary course of business, business and sales of obsolete assets not constituting a product line or business and except for sales, leases, licenses or other dispositions of assets not constituting a product line or business with a fair market value not in excess of $250,000 30 million in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(oxvii) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h5.1(h)(i) of the Company Disclosure Letter, or as otherwise required by applicable Law, (iA) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice, (iiB) increase the levels of compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, except for increases in the ordinary course of business consistent with past practice for employees who are not officers, (iiiC) establish, adopt, amend in any material respect or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (ivD) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (vE) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; GAAP or applicable Law, or (viF) forgive any loans to directors, officers or or, other than in the ordinary course of business consistent with past practices, employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(sxviii) agree, authorize or commit to do any of the foregoing.
(b) Each of the Company and Parent shall designate an officer as its representative for purposes of consulting with the other, as reasonably requested by the Company or Parent, with respect to business of the Company and its Subsidiaries, provided that any such consultation shall be conducted in accordance with any requirements of applicable Law.
(c) The Company agrees that from and after the date hereof it shall cause its Subsidiaries to consult with representatives of Parent with respect to any negotiation of a new contract to replace the agreement set forth on Section 5.1(o) of the Company Disclosure Letter designated as expiring on December 31, 2006.
Appears in 1 contract
Interim Operations. The Company covenants and agrees that, except (i) as to itself and its Subsidiaries thatexpressly contemplated by this Agreement, or (ii) as agreed in writing by Parent, after the date hereof hereof, and prior to the Effective Time earlier of (unless Parent x) the termination of this Agreement in accordance with Article XI and (y) the Stock Purchase Closing Date, the Company shall, and shall otherwise approve in writingcause each of its Subsidiaries (including for purposes of this Section 6.1 the Clubs) to:
(a) conduct the business, operations, activities and except as required by applicable Laws or as provided for in this Agreement, each practices of the Company and its Subsidiaries shall conduct its business in and the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoingClub, from the date of this Agreement until the Effective Timerespectively, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000consistent with past practice;
(eb) except pursuant use its reasonable best efforts to Contracts in effect prior to the date of this Agreementpreserve its present business organization intact and maintain satisfactory relations with customers, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries employees, contractors, regulators and others having a value in excess of $50,000business dealings with it;
(fc) not amend its articles or certificates of incorporation or bylaws or comparable governing instruments;
(d) not, (i) except for (A) borrowing under Material Contracts (including, without limitation receivables purchase agreements) listed on Schedule 3.10(i), as in effect on the date hereof, and (B) additional borrowings from a recognized financial institution not involving the financing of VOI Receivables in a maximum amount of fifteen million dollars ($15,000,000.00) on terms that do not impose in relation to the sum being borrowed any material prepayment penalties, incur, or assume or become subject to, whether directly, indirectly or by way of guarantee or otherwise, any indebtedness (long-term, short-term or otherwise) for borrowed money, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person; or (iii) make any loans, advances or capital contributions to to, or investments in in, any other Person (x) other than the Company or any direct or indirect wholly-owned Subsidiary of the Company, (y) other than loans in excess the form of VOI Receivables and (z) ordinary advances (A) to employees for travel and related business expenses and (B) to commission-based sales representatives not exceeding $50,000 40,000 for any individual and $500,000 in the aggregate, in the case of each of clauses (x) through (z), in the ordinary course of business consistent with past practice;
(ge) declarenot (x) issue, set asidesell, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect grant pursuant to any of its capital stock or Plan (including the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or Option Plan), pledge, encumber, subject to any other direct Lien or indirect wholly-owned Subsidiarydispose of, (y) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide combine or reclassify or (z) redeem, purchase or otherwise acquire, directly or indirectlyin each case, any shares of its, any class or series of its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except other equity interest in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) or any of the Company Disclosure Letterits Subsidiaries or any options, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire purchase any debt security such capital stock or equity interest or any securities convertible into or exchangeable for such capital stock or equity interests or otherwise make or effect any change in the issued and outstanding capitalization of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course shares of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect Common Stock issued prior to the date Effective Time (A) upon the exercise of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the Options outstanding on the date of this Agreement and set forth in Section 5.1(h) of hereof under the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Option Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoing.
Appears in 1 contract
Sources: Agreement and Plan of Merger and Reorganization (Trendwest Resorts Inc)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the earlier to occur of (i) the date on which the designees of Parent and/or Merger Sub on the board of directors of the Company constitute a majority of the members of the Company’s board of directors and (ii) the Effective Time (the earlier of such dates, the “Control Date”) (unless Parent shall otherwise approve in writing, such approval not to be unreasonably withheld, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws or as provided for Law, the business of it and its Subsidiaries shall be conducted in this Agreementthe ordinary and usual course consistent with past practice and to the extent consistent therewith, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use their respective commercially reasonable efforts to preserve their business organizations intact its and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, landlords, licensors, licensees, employees and business organization associates. Notwithstanding the foregoing and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoingin furtherance thereof, from the date of this Agreement until the Effective TimeControl Date, except (Ai) as otherwise expressly permitted contemplated by this Agreement, (Bii) as Parent may approve in writing (such approval not to be unreasonably withheld withheld), (iii) as is required by applicable Law or delayed) by any Governmental Entity or (Civ) as set forth in Section 6.1 7.1 of the Company Disclosure LetterSchedule, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles certificate of incorporation (including by way of any certificates of designation) or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into except for any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessessuch transactions among wholly owned Subsidiaries of the Company;
(c) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $500,000 in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in accordance with benefits outstanding prior to effect as of the date hereof under of this Agreement, all of which are identified on Section 6.1(q) of the Company Stock Plans, Disclosure Schedule;
(d) issue, sell, pledge, dispose of, grant, transfer, encumbertransfer or subject to any Lien, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee grant or encumbrance oftransfer of or Lien on, any shares of capital stock of the Company or any of its Subsidiaries, including, without limitation shares of Series A Junior Participating Preferred Stock (in each case, other than the issuance or grant of Shares upon the exercise of Company Options that are outstanding as of the date hereof), or securities convertible or exchangeable into or exercisable for any shares of such capital stockstock or other equity interests, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-wholly owned Subsidiary of the Company) in excess of $50,000 500,000 in the aggregate;
(gf) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-wholly owned Subsidiary to the Company or to any other direct or indirect wholly-wholly owned Subsidiary) or enter into any agreement with respect to the voting of such its capital stock;
(hg) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock (other than the acquisition of any such capital stock, except stock or other securities tendered by current or former employees or directors in accordance connection with cashless the exercise provisions of rights granted prior to the date hereof under the currently outstanding Company Stock PlansOptions);
(ih) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee guaranty such indebtedness of another PersonPerson (other than a wholly owned Subsidiary of the Company), or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except in each case for indebtedness for borrowed money incurred indebtedness, in the ordinary course of business and consistent with past practices (i) practice, for borrowed money under credit facilities, lines of credit and other debt or borrowing arrangements reflected in the Financial Statements; provided, however that neither the Company nor its Subsidiaries shall draw down on any amounts under its existing credit facilities except to the extent necessary to comply with letters of credit, under credit facilities, lines of credit and other debt or borrowing arrangements reflected in the Company’s most recent financial statements included in the Company Reports issued from time to time in the ordinary course of business in an amount not to exceed $200,000 1,000,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregateaggregate outstanding at any given time;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(ki) make any material changes with respect to accounting policies or procedures, except as required to comply with, by changes in GAAP or to comply with changes in, GAAPLaw or by a Governmental Entity;
(lj) make, alter or revoke any Tax accounting method or material Tax election, or settle or compromise any litigation Tax liability or otherwise pay or consent to any assessment as the result of an audit, file any amended Tax Return, enter into any closing agreement relating to Taxes, or waive or extend the statute of limitations in respect of Taxes (other proceedings before a Governmental Entity for an amount than pursuant to extensions of time to file Tax Returns obtained in excess the ordinary course of $200,000 or any obligation or liability of the Company in excess of such amountbusiness);
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(nk) transfer, sell, lease, exclusively license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of of, or subject to any Lien, any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiariesother than inventory, except for sales or rental of inventory supplies and other assets in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets business consistent with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreementpast practice;
(ol) except as expressly contemplated by this Agreement, required pursuant to existing written, binding agreements or policies the Benefit Plans in effect prior to on the date of this Agreement and set forth disclosed in Section 5.1(h6.1(h)(i) of the Company Disclosure LetterSchedule, pursuant to any employment or separation agreement disclosed in Section 6.1(h)(vi) of the Company Disclosure Schedule or any collective bargaining agreement disclosed in Section 6.1(m) of the Company Disclosure Schedule, or as otherwise required by applicable Law, including to comply with Section 409A of the Code, (i) grant or provide any severance or termination payments or benefits to any directorofficers, officer employee, independent contractor or employee consultant of the Company or any of its Subsidiaries, (ii) increase (or commit to increase) the compensation, bonus perquisites or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards payable to any director, officer officer, employee, independent contractor or employee consultant of the Company or any of its Subsidiaries, except, in the case of except for increases with respect to non-executive employees who are not officers, in the ordinary course of business consistent with past practice practice, (iii) establishenter into any new, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awardsexisting, (iv) take any action to accelerate the vesting employment agreement or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive with any loans to directors, officers or employees member of management of the Company or any of its Subsidiaries, (iv) grant any equity or equity-based awards that may be settled in Shares or any other equity securities of the Company or any of its Subsidiaries or the value of which is linked directly or indirectly, in whole or in part, to the price or value of any Shares or other equity securities of the Company or any of its Subsidiaries, (vi) accelerate the vesting or payment of compensation payable or benefits provided or to become payable or provided to any current or former director, officer, employee, independent contractor or consultant, (vii) change the terms of any outstanding Company Option, or (viii) terminate or materially amend any existing, or adopt any new, Benefit Plan (other than changes that may be necessary to comply with applicable Law, in each case that do not materially increase the costs of any such Benefit Plans); provided, however, that the manner of any change, amendment or acceleration to comply with Section 409A of the Code must be approved by Parent, which approval shall not be unreasonably withheld or delayed); provided, further, that the Company shall take such actions as shall be necessary to cause any employee hired by the Company or any of its Subsidiaries after the date hereof to not be an “Eligible Employee” within the meaning of the Company’s Special Severance Plan authorized by the Company’s board of directors on May 7, 2007;
(m) enter into, amend or extend any collective bargaining agreement or other labor agreement;
(n) enter into, amend or modify any agreement of the type described in Section 6.1(s);
(o) make any capital expenditures in excess of $100,000 individually or $300,000 in the aggregate over and above those capital expenditures identified in the capital expenditure plan set forth in Section 7.1(o) of the Company Disclosure Schedule;
(p) take enter into any action rights agreement, establish any stockholder rights plan (or omit similar plan commonly referred to take as a “poison pill”) or enter into any action that is reasonably likely to result Contract (in each case other than the Stock Plans existing on the date hereof and Company Options issued thereunder) under which the Company or any of the conditions its Subsidiaries is or may become obligated to the Merger set forth in Article VII not being satisfied;sell or otherwise issue, register, redeem, repurchase, vote, transfer or dispose of any shares of its capital stock or any other securities; or
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) except as provided in Section 7.2 and Section 7.3, agree, authorize or commit to do any of the foregoing. Nothing contained in this Agreement (including, without limitation, this Section 7.1) is intended to give Parent, directly or indirectly, the right to control or direct the Company’s or any of its Subsidiaries’ operations prior to the Control Date, and nothing contained in this Agreement is intended to give the Company, directly or indirectly, the right to control or direct Parent’s or any of its Subsidiaries’ operations. Prior to the Control Date, each of Parent, Merger Sub and the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations. Subject to the immediately preceding paragraph, in connection with the continued operation of the Company and the Subsidiaries, the Company will reasonably confer in good faith on a regular basis with one or more representatives of Parent, designated by Parent to the Company in writing, regarding operational matters, and the general status of ongoing operations of the Company and will notify Parent promptly of any event or occurrence that has had or may reasonably be expected to have a Company Material Adverse Effect or that, individually or in the aggregate, has materially delayed or impaired, or would reasonably be expected to materially delay or impair, consummation of the transactions contemplated by this Agreement, or that, individually or in the aggregate, has resulted, or would reasonably be expected to result, in the failure by the Company to comply with or satisfy in any material respect any condition set forth in Section 8.1 or 8.2; provided, however, that no such notification shall affect the covenants or agreements of the parties or the conditions to the obligations of the parties under this Agreement. The Company acknowledges that Parent does not and will not waive any rights it may have under this Agreement as a result of such notice or consultations.
Appears in 1 contract
Sources: Merger Agreement (Topps Co Inc)
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof July 20, 2020 and prior to the Effective Time (unless Parent shall otherwise approve in writing) writing in advance (which approval shall not be unreasonably withheld, delayed or conditioned)), and except as otherwise expressly contemplated by this Agreement or as required by a Governmental Entity or applicable Laws or as provided for Law, its business and the business of its Subsidiaries shall be conducted in this Agreementall material respects in the Ordinary Course and, each of to the Company extent consistent therewith, it and its Subsidiaries shall conduct its (i) preserve their business organizations in the ordinary course consistent with past practice good standing pursuant to applicable Law and it shall (ii) use their respective commercially reasonable efforts to preserve intact its maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business organization and relationships with third parties associates and keep available the services of its and its Subsidiaries’ respective present officers officers, employees and employees. agents, except as otherwise expressly required by this Agreement or as required by a Governmental Entity or applicable Law, provided that no action by the Company with respect to matters permitted by any provision of clauses (i)-(xxii) of Section 7.1(b) below shall be deemed a breach of the obligations under this sentence unless such action would constitute a breach of such other provision.
(b) Without limiting the generality of of, and in furtherance of, the foregoing, from the date of this Agreement July 20, 2020 until the Effective Time, except as otherwise expressly (A) as otherwise expressly permitted contemplated by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld required by a Governmental Entity or delayed) or applicable Law, (C) as approved in writing in advance (which approval shall not be unreasonably withheld, delayed or conditioned) by Parent or (D) set forth in Section 6.1 7.1(b) of the Company Disclosure Letter, the Company will has not and will shall not and has not and shall not permit its Subsidiaries to:
(ai) adopt or propose any change in its articles of incorporation (x) the Company’s Organizational Documents or bylaws or other applicable governing instruments(y) any Subsidiary’s Organizational Documents;
(bii) merge or consolidate the Company itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly owned Subsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(ciii) (A) acquire (1) (by merger, consolidation or acquisition of stock or assets) any other Person or (2) to the extent in excess of $5,000,000 in the aggregate, any material equity in any other Person therein or (B) enter into any joint venture, legal partnership or similar arrangement (other than commercial agreements with partners in accordance the Ordinary Course that do not involve the formation of an entity with benefits outstanding prior to the date hereof any third Person or require equity investing);
(iv) except as otherwise permitted under clause (xvii) below and except for issuances under the Company Stock PlansESPP authorized under Section 3.5(c), issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance Encumbrance of, or otherwise enter into or amend any Contract or understanding with respect to the voting of, any shares of its capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or Company Equity Awards or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiessecurities (other than the issuance of shares (A) by its wholly owned Subsidiary to it or another of its wholly owned Subsidiaries, (B) in respect of Company Warrants and Company Equity Awards, in each case outstanding as of July 20, 2020 and issued in accordance with their terms in effect as of July 20, 2020 and, as applicable, the Stock Plan or (C) under the ESPP);
(dv) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company Encumbrance (other than a Permitted Encumbrance or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000as otherwise permitted by Section 7.1(b)(x));
(fvi) make any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company or and any direct or indirect wholly-of its wholly owned Subsidiary of the CompanySubsidiaries) in excess of $50,000 250,000 in the aggregate;
(gvii) make any loans or advances to, guarantees for the benefit of, or enter into any other material transaction with any Company Employee or Affiliates other than advances for business, travel-related, relocation or other similar expenses in accordance with currently existing Company policy;
(viii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries other equity or voting interest (except for dividends paid by any direct or indirect wholly-wholly owned Subsidiary to the Company it or to any other direct or indirect wholly-wholly owned Subsidiary) or enter into any agreement with respect to the voting of such its capital stock;
(hix) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, or offer to redeem, repurchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such its capital stock, except other than the withholding of shares of Company Common Stock to satisfy the exercise price or withholding Tax obligations upon the exercise, vesting or settlement of outstanding Company Equity Awards in accordance with cashless exercise provisions of rights granted prior to their terms and, as applicable, the date hereof under the Company Stock PlansPlan;
(ix) except under credit facilities set forth in unless otherwise permitted by Section 5.1(j)(i)(D) of the Company Disclosure Letter7.1(b)(xvii), incur any indebtedness for borrowed money or guarantee such indebtedness Indebtedness (including the issuance of another Person, or issue or sell any debt securities or securities, warrants or other rights to acquire any debt security security), except for (A) trade payables incurred in the Ordinary Course and intercompany loans or advances between or among the Company and/or its direct or indirect wholly-owned Subsidiaries, (B) other Indebtedness not to exceed $750,000 in the aggregate or (C) guarantees of Indebtedness of wholly owned Subsidiaries otherwise incurred in compliance with this Section 7.1;
(xi) except as set forth in the Company’s capital budget, make or authorize any capital expenditures in excess of $1,000,000 in the aggregate during any fiscal quarter (it being understood that any portion of the capital expenditures budget for any fiscal quarter and such $1,000,000 in excess thereof not expended in such fiscal quarter, beginning with the first quarter of the fiscal year ended March 31, 2021, may be carried forward and, together with any amount otherwise permissible pursuant to this paragraph (xi), expended in any future fiscal quarter; provided that any excess amount not expended in the final quarter of a fiscal year will not be carried forward into the next fiscal year);
(xii) other than in the Ordinary Course, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or amend, modify supplement, waive, terminate, assign, convey, Encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract, other than (A) expirations of any such Contract in the Ordinary Course in accordance with the terms of such Contract, or (B) non-exclusive licenses, covenants not to ▇▇▇, releases, waivers or other rights under Intellectual Property Rights owned by the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in each case, granted in the ordinary course Ordinary Course;
(xiii) settle, release, waive or compromise any Proceedings except solely for monetary payments of business consistent with past practices (i) not to exceed no more than $200,000 750,000 individually or $1,500,000 in the aggregate, net of applicable insurance payments, recoveries or proceeds, or on a basis that would (iiA) prevent or materially delay consummation of the Merger or the Transactions, or (B) result in replacement the imposition of existing indebtedness for borrowed money on terms substantially consistent with any term or more beneficial than condition that would materially restrict the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries future activity or conduct of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 its Subsidiaries or a finding or admission of notional debt in the aggregatea criminal violation of Law;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(kxiv) make any changes (other than di minimis changes) with respect to accounting policies or procedures, except as required to comply with, by GAAP or to comply with changes in, GAAPapplicable Law;
(lxv) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(mA) make, change or revoke any income or other material Tax election, (B) adopt or change any material Tax election or Tax accounting method, (C) file any amended Tax Return, (D) enter into any closing agreement with respect to any Taxes, (E) settle any material Tax claim, audit, assessment or dispute, (F) surrender any right to claim a refund of a material amount of Taxes, (G) consent to any extension or waiver of any limitation period with respect to any material Tax claim or assessment, (H) enter into any Tax sharing or similar agreement or arrangement, (I) fail to timely pay any material Tax that becomes due and payable or (taking into account all applicable extensionsJ) file all Tax Returns required to be filed, and pay all incur any Taxes required to be paid, on or before outside of the Closing DateOrdinary Course;
(nxvi) transfer, sell, lease, license, divest, cancel, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assetsassets (tangible or intangible), rights, properties, product lines or businesses businesses, in whole or in part, material to it or any of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, (A) sales of obsolete assets and in the Ordinary Course, (B) sales, leases, licenses leases or other dispositions of assets (not including services) with a fair market value Fair Value not in excess of $250,000 5,000,000 in the aggregate, aggregate other than pursuant to Material Contracts in effect prior to July 20, 2020 and (C) non-exclusive licenses entered into in the date of Ordinary Course and (D) Encumbrances securing Indebtedness permitted under this AgreementSection 7.1(b) and (E) Permitted Encumbrances;
(oxvii) except as required pursuant to existing written, binding agreements or policies the terms of any Company Benefit Plan in effect prior to the date as of this Agreement and set forth in Section 5.1(h) of the Company Disclosure LetterJuly 20, 2020 or as otherwise required by applicable Law, (iA) grant or provide any severance or termination payments or benefits to any director, officer Company Employee or employee of the Company or any of its Subsidiariesother service provider, (iiB) increase the compensation, bonus compensation or pension, welfare, severance benefits payable to any Company Employee or other benefits ofservice provider, pay any bonus to, except for annual merit-based increases in base salary or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, base wages in the case of employees Ordinary Course for Company Employees or other service providers who are not officers, in the ordinary course of business consistent directors or Executive Officers and whose annual base compensation is less than $250,000 (with past practice no such increase to exceed three (3) percent (3%)), (iiiC) establish, adopt, enter into, amend or terminate any material Company Benefit Plan or amend the terms of any outstanding equity-based awardsother material benefit or compensation plan, program, policy, agreement or arrangement that would be a Company Benefit Plan if in effect on July 20, 2020, (ivD) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, to Plan other than vesting acceleration of all Company Options and Company RSUs in the extent not already provided in any such Benefit PlanMerger as contemplated by Section 3.5(b), (vE) grant any new awards, or amend or modify the terms of any outstanding awards (including, without limitation, any Company Equity Awards), (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan that is required by applicable Law to be funded or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or , (viG) forgive any loans, issue any loans or advance any loans to directorsany current or former Company Employees, officers (H) hire or engage any employee or engage any independent contractor (who is a natural person) with an annual base salary or wage rate or consulting fees in excess of $275,000 or (I) terminate the employment or engagement of any Company Employee or other service provider whose annual base compensation exceeds $275,000 other than for cause;
(xviii) recognize any union, works council or other labor organization as the representative of any of the employees of the Company or any of its the Subsidiaries, or enter into, modify, or terminate any Company Labor Agreement, in each case, except as required by applicable Law;
(pxix) take implement or announce any action employee layoffs or omit to take any action location closings, that is reasonably likely to result in any of would implicate the conditions to the Merger set forth in Article VII not being satisfiedWARN Act;
(qxx) take enter into any action Contract which contains a change in control or similar provision that would violate be triggered in connection with this Agreement or the CIAMerger;
(rxxi) knowingly take other than in the Ordinary Course, amend or permit modify in any material respect, or extent, renew or terminate any lease, sublease, license or other agreement for the use or occupancy of its Subsidiaries to take any action that is reasonably likely to prevent real property, or enter into any new lease, sublease, license or other agreement for the consummation use or occupancy of any real property;
(xxii) maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice in any material respects;
(xxiii) engage in any transaction with, or enter into any agreement, arrangement or understanding with, any Affiliate of the MergerCompany or other Person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404; or
(sxxiv) agree, authorize or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after (a) From the date hereof and prior until the earlier of the Closing Date or the date, if any, on which this Agreement is terminated pursuant to Section 8.1 (the Effective Time (unless Parent “Termination Date”), the Seller shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, each of cause the Company and its Subsidiaries shall each Subsidiary to (i) conduct its business the Business only in the ordinary course consistent with past practice Ordinary Course of Business and it shall (ii) use reasonable best efforts to preserve intact its the business organization and goodwill of the Business, to maintain the Company’s and each Subsidiary’s relationships with the Clients, insurance underwriters and other third parties having business dealings with the Company or the Subsidiaries and to keep available the services of its present officers the key Business Employees.
(b) In furtherance of, and employees. Without without limiting the generality of of, Section 6.1(a), except as expressly permitted by this Agreement or as approved in writing by the foregoingPurchaser (which approval shall not be unreasonably withheld, conditioned or delayed), from the date of this Agreement hereof until the Effective Timeearlier of the Closing Date or the Termination Date, except neither the Company nor any Subsidiary shall (and the Seller shall not permit the Company or any Subsidiary to):
(i) take or omit to take any action that results or may reasonably be expected to result in any of the representations and warranties of the Seller set forth herein being or becoming untrue in any material respect or in any of the conditions precedent set forth in Sections 7.1 and 7.3 not being satisfied;
(ii) amend or otherwise change the Organizational Documents;
(iii) (A) as otherwise expressly permitted by this Agreementauthorize, issue, sell or transfer any Shares or other equity securities of the Company or any Subsidiary, (B) as Parent may approve in writing (such approval not to be unreasonably withheld adjust, split, combine, reclassify or delayed) redeem any Shares or (C) as declare, authorize, set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt aside or propose pay any change in its articles of incorporation or bylaws dividend or other applicable governing instrumentsdistribution (whether in cash, stock or other property) in respect of any Shares;
(biv) merge or consolidate the Company or any of its Subsidiaries with any other Person, acquire any business or restructureassets of any other Person (whether by merger, reorganize stock purchase, asset purchase or completely other business combination) or partially liquidate or otherwise enter into form any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessessubsidiary;
(cv) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization;
(vi) make any material change in the operation of the Business, except such changes as may be required to comply with any Applicable Law;
(vii) enter into, amend in any material respect or terminate (other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plansits terms) any Material Contract, issueor waive, release or assign any rights or claims thereunder;
(viii) sell, pledgelease (as lessor), transfer or otherwise dispose of, grant, transferor mortgage, encumber, pledge or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance ofimpose any Lien on, any shares of capital stock assets or properties of the Company or any its SubsidiariesSubsidiary, other than dispositions of immaterial assets or securities convertible or exchangeable into or exercisable properties in the Ordinary Course of Business for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesfair value;
(dix) materially and adversely modifycreate, terminate incur, assume or renew guarantee any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of businessIndebtedness, or (ii) if consummation of the transactions contemplated by this Agreement extend or compliance by the Company with the provisions of this Agreement will conflict with, or result in modify any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000existing Indebtedness;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(fx) make any loans, advances or capital contributions to to, or investments in in, any Person Person;
(other than xi) cancel any debts owed to, or waive any claims or rights held by, the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregateSubsidiary;
(gxii) declarecommence, set asidesettle or compromise any Action by or against the Company or any Subsidiary, make other than settlements entered into in the Ordinary Course of Business that require only the payment of monetary damages in an aggregate amount not to exceed $25,000;
(xiii) (A) institute or pay announce any dividend increase in the compensation, bonuses or other distribution, benefits payable in cash, stock, property or otherwise, with respect to any Business Employee, (B) enter into or amend any employment, consulting, deferred compensation, severance or change of its capital stock control agreement with any Business Employee, or the capital stock of its Subsidiaries (C) enter into, adopt or amend any Employee Benefit Plan;
(xiv) engage in any transaction with any Affiliates, except for dividends paid by any direct or indirect wholly-owned Subsidiary transactions that are at prices and on terms and conditions not less favorable to the Company or to any other direct or indirect whollythe Subsidiaries than could be obtained on an arm’s-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stocklength basis from unrelated third parties;
(hxv) change any accounting methods, policies or procedures, other than as required by Section 5.1(r), reclassify, split, combine, subdivide Applicable Law or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(lxvi) settle fail to pay any litigation accounts payable when due (other than amounts being contested in good faith) or other proceedings before a Governmental Entity for an amount in excess of $200,000 or fail to use commercially reasonable efforts to collect any obligation or liability of the Company in excess of such amountaccounts receivable when due;
(mxvii) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is intended or would reasonably likely be expected to result in any of the conditions to of the Merger Closing set forth in Article VII 7 not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger, except, in every case, as may be required by Applicable Law; or
(sxviii) agreeenter into any agreement, authorize commitment or commit understanding (whether written or oral) with respect to do any of the foregoing.
(c) From the date hereof until the Closing Date, neither the Company nor any Subsidiary shall make, rescind, or change any election with respect to Taxes; change any Tax accounting period; adopt or change any method of Tax accounting; file any amended Tax Return; enter into an agreement with respect to Taxes with any Governmental Authority (including a “closing agreement” under Code section 7121); surrender any right to claim a refund for Taxes; consent to an extension of the statute of limitations applicable to any Tax claim or assessment; or take any other similar action.
Appears in 1 contract
Sources: Stock Purchase Agreement (First Financial Holdings Inc /De/)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after (j) From the date hereof and prior to until the Effective Time (unless Parent shall otherwise approve in writing) and Closing, except as otherwise expressly permitted or required by applicable Laws or as provided for in this Agreement, each the Ancillary Agreements or as set forth in Section 5.1 of the Company and its Subsidiaries Disclosure Letter, the Group Companies shall conduct its business the Business in the ordinary course of business consistent with past practice and it and, to the extent consistent therewith, the Group Companies shall use their respective commercially reasonable efforts to to, in all material respects, (i) preserve intact its their present business organization organizations, (ii) maintain generally their existing relations and goodwill with Governmental Authorities, customers, lessors, employees and business associates, in each case, with whom the Group Companies have significant relationships with third parties and (iii) keep available the services of its their present officers employees and employeesagents. Without limiting the generality generality, and in furtherance, of the foregoing, from the date of this Agreement hereof until the Effective TimeClosing, except (A) as otherwise expressly permitted or required by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld the Ancillary Agreements or delayed) or (C) as set forth in Section 6.1 5.1 of the Company Disclosure LetterLetter or otherwise consented to in writing by Buyer, which consent shall not be unreasonably conditioned, withheld or delayed, the Company will not and will not permit its Subsidiaries toGroup Companies shall not:
(ai) adopt amend any of their Organizational Documents or propose take or authorize any change in action to wind up its articles of incorporation affairs or bylaws or other applicable governing instrumentsdissolve;
(bii) merge (A) except as provided under Section 5.5 or consolidate Section 5.13, amend in any material respect or terminate any Company Benefit Plan or establish any new arrangement that would (if it were in effect on the date hereof) constitute a Company Benefit Plan, (B) except for merit increases in the ordinary course of business consistent with past practice for Persons other than the individuals listed on Exhibit B, take any action to increase the rate of compensation (or compensation opportunity) of any of its Subsidiaries with employees, directors or managers, (C) except as otherwise contemplated by this Agreement, grant, increase or accelerate the vesting or time of payment of, or in any way cause the funding of, any other Personcompensation, benefits, severance or restructureother termination or retirement pay payable to any of its current or former employees, reorganize directors or completely managers, (D) hire or partially liquidate terminate (other than for cause) any employee, other than in the ordinary course of business consistent with past practice, with respect to a newly-hired employee, where the aggregate salary and target bonus does not exceed $150,000, (E) issue or otherwise forgive any loans to any employee, director, manager or consultant or (F) enter into any agreements collective bargaining agreement that materially increases the Company’s obligations in respect of the covered employees, other than, in each case, to the extent required under any Company Benefit Plan, or arrangements imposing material changes any other written agreement in effect as of the date of this Agreement or restrictions on its assets, operations or businessesby applicable Law;
(ciii) other than in accordance with benefits outstanding prior pursuant to the date hereof terms of Options under the Company Stock PlansOption Plan outstanding as of the date of this Agreement, issue, sell, pledge, dispose of, grant, transfer, encumbergrant options, warrants or rights to receive, purchase or subscribe for, or authorize or enter into any arrangement or Contract with respect to the issuance, sale, pledge, disposition, granttransfer or sale of, or redeem or repurchase any Units or other equity interests or securities convertible into equity securities of any Group Company or make any changes (by combination, reorganization or otherwise) in the capital structure of the Group Companies; provided, that if any issuance permitted hereunder would result in a Person who is not a party to this Agreement owning Units, such Person shall be required to execute and deliver a Joinder Agreement in the form of Exhibit E (a “Joinder Agreement”) simultaneously therewith;
(iv) acquire any material properties or assets outside the ordinary course of business consistent with past practice (other than pursuant to written agreements in effect as of the date of this Agreement);
(v) sell, assign, transfer, convey, lease, license, guarantee license or encumbrance otherwise dispose of, pledge or encumber or grant any shares Lien (other than a Permitted Lien) on, any of capital stock of the Company its properties or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
Assets (d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of businessbusiness consistent with past practice);
(vi) make any change to its accounting policies or practices, except as required by GAAP or applicable Law;
(vii) adopt a plan of complete or partial merger, consolidation, restructuring, recapitalization, liquidation, dissolution or other reorganization of any Group Company (other than the transactions contemplated hereby);
(viii) make any capital expenditures or commitments for capital expenditures in excess of $250,000, other than pursuant to the Company’s current capital expenditures budget as set forth in Section 5.1(a)(viii) of the Company Disclosure Letter;
(ix) forgive, cancel or compromise any material debt or claim, or waive or release any right of material value;
(x) incur or suffer to exist any Indebtedness within the meaning of clause (i) or (ii) if consummation or (iii) of the transactions contemplated by this Agreement or compliance by definition thereof except for (A) working capital borrowings pursuant to the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any terms of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; providedExisting Credit Facilities, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts (B) immaterial other Indebtedness incurred in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification consistent with past practice or renewal at a cost of less than $200,000;
(eC) except Indebtedness accruing automatically pursuant to Material Contracts evidencing Indebtedness in effect prior to as of the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(fxi) make any material loans, advances advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Group Company) in excess of $50,000 in the aggregate);
(gxii) fail to pay or satisfy when due any material Liability of any Group Company (other than any such Liability that is being contested in good faith);
(xiii) declare, set aside, make or pay any non-cash dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect whollynon-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) cash distribution or enter into any agreement Contract with respect to the voting of such capital stockits Units;
(hxiv) abandon, fail to maintain or allow to expire (other than as required by Section 5.1(rat the natural expiration of its terms), reclassify, split, combine, subdivide or redeem, purchase sell or otherwise acquire, directly or indirectlyexclusively license to any Person, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for Group Company IP Rights owned by any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock PlansGroup Company;
(xv) (A) enter into any Contract that would have been a Material Contract within the meaning of clause (i), (ii), (iii), (v) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or (other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred than those Contracts which are entered into in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregatepractice), (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replacedix), (iiixiii), (xiv), (xv), (xvi) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(jxvii) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking Section 2.8 if entered into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
hereof, (oB) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice practice, terminate any Material Contract or (iiiC) establish, adopt, amend or terminate modify any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or Material Contract in any material respect (other way secure than those amendments or modifications to Material Contracts within the payment, meaning of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or clause (vi) forgive any loans to directors, officers or employees (vii) which are made in the ordinary course of the Company or any of its Subsidiariesbusiness consistent with past practice);
(pxvi) take except as required by Law, make any action Tax election, change any annual Tax accounting period or omit to take any action that method of Tax accounting, amend any Tax Return, file a claim for any Tax refund, enter into any closing agreement, or settle or otherwise resolve any Tax claim, audit, examination, adjustment or assessment that, in each case, is reasonably likely to result in any of the conditions material to the Merger set forth in Article VII not being satisfiedGroup Companies;
(qxvii) take settle or compromise any action that would violate Litigation pending before any Governmental Authority, or any other material Litigation, against any Group Company, other than settlements or compromises of Litigation which, in the CIA;
(r) knowingly take or permit any aggregate, do not involve money damages in excess of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger$150,000; or
(sxviii) agree, authorize agree or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after (a) From the date hereof and prior to until the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws earlier of the Closing or as provided for in termination of this Agreement, each of Seller shall (i) operate the Company and its Subsidiaries shall conduct its business Business only in the ordinary course consistent Ordinary Course of Business, including maintaining appropriate service levels, and in compliance with past practice applicable Law including any COVID-19 Measures; and it shall (ii) use commercially reasonable efforts to (A) maintain and preserve intact its the business organization and goodwill of the Business, the Assets and the Assumed Liabilities, (B) maintain satisfactory relationships with Seller’s clients, operators, distributors, customers, insurance underwriters and other third parties having business dealings with Seller, (C) pay its debts and Taxes when due (subject to good faith disputes regarding such debts and Taxes for which reserves have been established) and pay or perform, in all material respects, other obligations when due, (D) maintain in effect all Permits and (E) maintain good relations with, and keep available the services of its present officers and employees. of, the Business Employees.
(b) Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 5.1(b) of the Company Disclosure LetterSchedule, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated as expressly permitted by this Agreement or compliance as approved in writing by ▇▇▇▇▇, from the Company with date hereof until the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any earlier of the properties Closing or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date termination of this Agreement, create Seller shall not take any action which would require disclosure on Section 2.8 of the Disclosure Schedule or:
(i) take or incur omit to take any Lien material action that results or may reasonably be expected to the Company or result in any of its Subsidiaries on the representations and warranties of Seller or the Beneficial Owners set forth herein being or becoming untrue in any assets material respect or in any of the Company or any of its Subsidiaries having a value in excess of $50,000conditions set forth herein not being satisfied;
(fii) make any loans, advances amend or capital contributions to or investments in any Person (other than otherwise change the Company or any direct or indirect wholly-owned Subsidiary organizational documents of the Company) in excess of $50,000 in the aggregateSeller;
(giii) (A) authorize, issue, sell or transfer any membership interests or other securities of Seller, (B) adjust, split, combine or reclassify or otherwise amend the terms of any membership interest or other security of Seller, (C) declare, authorize, set aside, aside make or pay any dividend or other distribution, payable distribution (whether in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiaryproperty) or (D) enter into any agreement with respect to the voting of such capital stockany equity of Seller;
(hiv) (A) merge or consolidate with any other Person, acquire any business or assets of any other Person (whether by merger, stock purchase, asset purchase or other business combination), other than as required by Section 5.1(r), reclassify, split, combine, subdivide the purchase of supplies in the Ordinary Course of Business or redeem, purchase or otherwise acquire, directly or indirectly, (B) form any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plansnew Subsidiary;
(iv) except under credit facilities set forth in Section 5.1(j)(i)(D(A) materially change the operation of the Company Disclosure LetterBusiness, Assets or the Assumed Liabilities or any method of purchase, sale, lease, management, marketing, promotion or operation, except such changes as may be required to comply with any Law or the terms of this Agreement or (B) enter into a new line of business or abandon or discontinue an existing line of business;
(vi) make any loans, advances or capital contributions to, or investments in, any Person (other than advances of expenses to Business Employees in the Ordinary Course of Business);
(vii) (A) institute or announce any increase in the compensation, bonuses or other benefits payable to any Business Employees, (B) enter into, amend or waive any rights under any employment, consulting, severance or change of control agreement with any Business Employee, (C) grant any severance or termination pay (cash, equity or otherwise) to any Business Employee, (D) enter into, adopt, amend or terminate any Employee Benefit Plan or (E) hire any Business Employee or terminate or transfer any Business Employee (other than for cause);
(viii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or incur any indebtedness Lien on or otherwise encumber any Assets, other than in the Ordinary Course of Business;
(ix) acquire any real property or undertake or commit to undertake capital expenditures for borrowed money the purchase of equipment or guarantee such indebtedness tangible assets exceeding $35,000 in the aggregate;
(x) agree to, request or adopt (A) any moratorium or suspension of another Personpayment of any Indebtedness, (B) the appointment of a receiver, administrator, liquidator, assignee, trustee or other similar official with respect to Seller, (C) an assignment for the benefit of creditors or an admission in writing of the inability of Seller to pay its debts as they become due, or (D) any other thing under any applicable Law relating to bankruptcy or insolvency with similar effect as any of the foregoing (A) through (C);
(xi) incur any Indebtedness or issue or sell any debt securities or warrants or other rights to acquire debt securities of Seller or assume, guarantee or endorse, as an accommodation or otherwise, the obligations of any debt security Person for Indebtedness or capital obligations, in the case of any of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregateforegoing;
(jxii) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make cancel any debts owed to or authorize any capital expenditure claims held by Seller in excess of $200,000 in the aggregate during any 12 month period35,000;
(kxiii) make abandon, disclaim, dedicate to the public, sell, assign or grant any changes security interest in, to or under any Business Intellectual Property or Business IP Agreement;
(xiv) disclose any confidential or proprietary information or confidential Business Intellectual Property to any Person, other than employees of Seller that are subject to a confidentiality or non-disclosure covenant protecting against further disclosure thereof or to other contractors or representatives of Seller who are similarly subject to such an obligation of confidentiality and non-disclosure pursuant to a written agreement with respect to accounting policies or proceduresthe Seller;
(xv) revalue any of the assets of the Seller, except as required to comply withby GAAP, or enter into, or permit any of the assets of the Seller to comply with changes in, GAAPbecome bound by any Contract that is or would constitute a Material Contract;
(lxvi) settle (A) change any litigation method of accounting or accounting practice, other proceedings before a Governmental Entity for an amount than changes required under applicable Law or GAAP or (B) fail to maintain the Seller’s books, accounts and records in excess the Ordinary Course of $200,000 or any obligation or liability of the Company in excess of such amountBusiness;
(mxvii) make, adopt revoke or change any material Tax election by Seller that could adversely impact the amount of Taxes due or Tax accounting method, payable (and/or any direct or fail to timely (taking into account all applicable extensionsindirect owner of equity interests in Buyer) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before after the Closing Date;
(nxviii) transfermodify, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon amend or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, terminate (other than pursuant to Contracts the expiration of its term other than as a result of any action taken by Seller, or other than as a result of a material breach by the counterparty thereto) any Contract currently in effect prior to the date of this Agreementor termination release or assign any material rights or claims thereunder;
(oxix) except as fail to pay any required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance maintenance or other benefits ofsimilar fees or otherwise fail to make required filings or payments required to maintain and further prosecute any applications for registration of Owned Intellectual Property or otherwise abandon, pay let lapse or fail to protect any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its SubsidiariesOwned Intellectual Property;
(pxx) take commence, settle or compromise any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfiedProceeding;
(qxxi) take cancel, materially reduce or fail to maintain any action that would violate the CIAinsurance policy;
(rxxii) knowingly take change or permit modify the Seller’s credit, collection, or payment policies, procedures or practices, including acceleration of collections or receivables (whether or not past due) in any material respect or fail to pay or delay payment of its Subsidiaries to take payables or other Liabilities in any action that is reasonably likely to prevent the consummation of the Mergermaterial respect;
(xxiii) engage in any transaction with any Related Parties; or
(sxxiv) agree, authorize or commit enter into any agreement, commitment or understanding (whether written or oral) with respect to do any of the foregoing.
Appears in 1 contract
Sources: Asset Purchase Agreement (Tivic Health Systems, Inc.)
Interim Operations. The Company covenants and agrees as (1) During the Interim Period, Vendor shall procure that there shall not be any event, change or circumstance that would reasonably be expected to itself and its Subsidiaries thatresult in a Material Adverse Effect on Company’s business, after financial conditions or the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stockAssets, or any options, warrants interruption or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if alternation in existence on the date hereof, (i) except in the ordinary course of Company’s business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement and Company’s business will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts be carried on lawfully and in the ordinary course of business so as to maintain it as a going concern.
(2) Except as may be necessary in connection with the extent such Contracts can completion of the Inter-company Debt Transactions or as may be terminated after set forth in any such entering intoWork Program or as may be required to fulfill its obligations under this Agreement, modification Vendor will, during the Interim Period, cause Company to be operated in the ordinary course of business consistent with past practices, and will not, without the prior written consent of Purchaser, which consent will not be unreasonably withheld, delayed or renewal at a cost of less than $200,000conditioned, permit Company to:
(i) materially amend or agree to materially amend or terminate the Dagang PSC and related agreements;
(eii) except pursuant relinquish any portion of the Contract Areas under the Dagang PSC;
(iii) amend any approved annual Budget or Work Program and Budget under the Dagang PSC unless the value of the amendment, individually or in the aggregate, is less than two percent (2%) of the annual Budget or Work Program;
(iv) fail to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or perform any of its Subsidiaries on material obligations under the Dagang PSC;
(v) dispose of, lease, license, surrender, abandon or allow to expire, or set or permit a third party to set any assets of the Company or Encumbrance except for a Permitted Encumbrance on, any of its Subsidiaries having Assets, which is in violation of any of the Title and Operating Documents or the Regulations, or, individually or in the aggregate, results in a decrease in the value in excess of the Company’s assets greater than One Hundred Thousand Dollars ($50,000100,000);
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(gvi) declare, set aside, make or pay any dividend or other distribution,
(vii) do or allow to be done anything which would reasonably be expected to result in a decrease in the fair market value of the business, payable in cashfinancial condition or Assets of Company, stockthat taken as a whole, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries exceeds Thirty Thousand Dollars (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock$30,000);
(hviii) other than as required by Section 5.1(r)make any material change in any accounting method, reclassifypractice, split, combine, subdivide policy or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plansprocedure;
(iix) except make or commit any single capital or extraordinary expenditure in excess of One Hundred Thousand Dollars ($100,000) not included in the approved annual Budget and Work Program and Budget for year 2012 under credit facilities set forth the Dagang PSC;
(x) make or commit any capital expenditure in Section 5.1(j)(i)(Drelation to Company’s operations after the end of year 2012;
(xi) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred than in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregatebusiness;
(jxii) issue, deliver or sell or propose the issuance, delivery or sale of any securities, options, warrants, calls, conversion rights or commitments relating to its securities of any kind or issue, or issue or authorize issuance of any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for the obligation of any Person, except as set forth in the capital budgets set forth in Section 6.1(j) ordinary course of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month periodbusiness;
(kxiii) make amend in any changes with material respect or terminate any of the Material Agreements prior to accounting policies or proceduresthe expiration thereof or, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales any of obsolete assets the Title and salesOperating Documents;
(xiv) enter into any new material agreement with respect to the Assets which, leases, licenses individually or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other would have a Financial Impact on Company of more than pursuant to Contracts in effect prior to the date of this AgreementSeventy-five Thousand Dollars ($75,000);
(oxv) except make any material change in the terms and conditions with respect to employment, compensation or benefit of, or severance payable to, any of its directors, employees or consultants; and
(xvi) initiate any litigation or other legal proceedings, or fail to promptly notify Purchaser in writing of any litigation or other legal proceedings, involving Company and/or the Assets. Notwithstanding the foregoing, Purchaser acknowledges that Vendor and Company may proceed with and complete the Inter-company Debt Transactions during the Interim Period.
(3) Except as required pursuant to existing writtenmay be necessary in connection with the completion of the Inter-company Debt Transactions, binding agreements or policies in effect prior to the date of this Agreement and as may be set forth in Section 5.1(h) of the Company Disclosure Letterany Work Program, or as otherwise required by applicable Lawis consistent with its past practice in a good and workmanlike manner, Vendor will, during the Interim Period, cause Company to:
(i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice in a good and workmanlike manner, operate, maintain and effect repairs to the Assets in a proper and prudent manner and in material compliance with the Material Agreements, the Title and Operating Documents and the Regulations;
(ii) pay or cause to be paid all costs and expenses relating to the Assets which become due and payable during the Interim Period;
(iii) establishperform and comply in all material respects with all applicable covenants and conditions contained in the Material Agreements, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, Title and Operating Documents and the Regulations;
(iv) take notify Purchaser in writing of all material communications with any action to accelerate relevant parties in respect of any of the vesting or payment, or fund or in any other way secure Material Agreements and the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, Title and Operating Documents; and
(v) change any actuarial continue in force all existing policies of insurance or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required renewals thereof presently maintained by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoingCompany.
Appears in 1 contract
Sources: Share Purchase and Sale Agreement (Ivanhoe Energy Inc)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after (a) From the date hereof and of this Agreement until the applicable Closing, except with the prior to written consent of the Effective Time (unless Parent shall Purchaser, otherwise approve in writing) and except required or contemplated by this Agreement or any other Transaction Agreement, as required by applicable Laws Law or Order, or as provided for in this Agreementset forth on Schedule 5.1, each of the Company Acquired Companies, the Seller and its Subsidiaries each other member of the Seller Group shall (i) conduct its business the Business and use and/or hold for use the Acquired Assets only in the ordinary course consistent Ordinary Course and in material compliance with past practice all applicable Laws and it shall Orders; (ii) use reasonable efforts Reasonable Efforts to (A) preserve intact the Business and the Acquired Assets, (B) maintain its business organization rights and franchises with respect to the Business and the condition of the Acquired Assets (except for ordinary wear and tear) and (C) maintain the Business’ goodwill and existing relationships with third parties customers, suppliers and keep available distributors and any other Persons with whom it has a significant business relationship; and (iii) pay all Accounts Payable and collect all Accounts Receivable only in the services of its present officers and employeesOrdinary Course. MASTER ACQUISITION AGREEMENT
(b) Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Timeapplicable Closing, except with the prior written consent of the Purchaser (which consent may not be unreasonably withheld, delayed or conditioned), otherwise required or contemplated by this Agreement or any other Transaction Agreement, as required by applicable Law or Order, or as set forth on Schedule 5.1, the Acquired Companies and, with respect to the Business, the Seller and the members of the Seller Group, shall not take any of the following actions:
(i) increase or improve the remuneration, benefits or terms of employment of any In-Scope Employee (as defined in the Employee Matters Agreement) other than (A) as otherwise expressly permitted by this Agreementin the Ordinary Course, (B) as Parent may approve in writing (such approval not to be unreasonably withheld required by Law or delayed) or Order, (C) as set forth in Section 6.1 pursuant to any Employee Benefit Plan of the Company Disclosure LetterSeller or the Seller Group as in effect on the date hereof (to the extent such increase applies to all employees of the Seller or the Seller Group), (D) as expressly provided for in the Company will not Employee Matters Agreement or any agreements forming a part thereof, or (E) in connection with retention agreements entered into in connection with the Contemplated Transactions (copies of which have been provided to the Purchaser and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles each of incorporation or bylaws or other applicable governing instrumentswhich is listed on Schedule 5.1(b)(i));
(bii) merge make any loan or advance to any Person other than any vendor financing consistent with past practice or otherwise in the Ordinary Course;
(iii) acquire (including by merger, consolidation or acquisition of stock or assets) any entity, business or material portion of the assets of any Person;
(iv) adopt a plan to, in whole or part, liquidate, dissolve, merge, consolidate or recapitalize any of the Acquired Companies;
(v) other than as permitted pursuant to subsection (vi) below, sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose of any Acquired Assets or any interest therein, except for (A) sales of Inventory in the Ordinary Course or other immaterial sales or dispositions; (B) products and services sold or assets otherwise disposed of in the Ordinary Course, (C) the transfer of Cash of the Business or any Acquired Company (it being expressly acknowledged and agreed by the Purchaser that the Seller shall be entitled to cause the transfer or distribution by the Seller Group or the Acquired Companies of all Cash held by the Seller Group or the Acquired Companies, including any Transferred Cash held in the Transferred Accounts, prior to the Initial Closing), or (D) the renewal, extension or amendment for a term that is no greater than two (2) years and otherwise on terms no less favorable in the aggregate than existing on the date hereof of any Assumed Real Property Lease in the Ordinary Course;
(vi) license, transfer, assign, or subject to any Encumbrance any Intellectual Property constituting an Acquired Asset, except for non-exclusive licenses to Intellectual Property granted in the Ordinary Course; or take any action (or fail to take any action) that would reasonably be likely to result in the loss, lapse, abandonment, invalidity or unenforceability of any such material Intellectual Property; MASTER ACQUISITION AGREEMENT
(vii) (A) make any material express or deemed election relating to Taxes that is inconsistent with past practices, (B) change or revoke any express or deemed election relating to Taxes unless otherwise required by Law, (C) file an amended Tax Return unless otherwise required by Law, (D) settle or compromise any material Legal Proceeding or other controversy relating to Taxes, (E) change any of its Subsidiaries methods or periods of reporting income or deductions for Income Tax purposes from those used in the preparation of the Income Tax Returns unless otherwise required by Law, (F) extend the limitations period for any claims or assessments of Taxes, (G) fail to file (or cause to be filed), on or prior to the due date thereof, all Tax Returns required to be filed for all Pre-Closing Periods, (H) fail to pay any Tax that is due and payable or shown as payable on a Tax Return, (I) surrender any right to claim a refund of Taxes (except for refund of Taxes which the Seller is entitled to pursuant to Section 9.3), or (J) enter into any closing agreement or advance pricing agreement, in each case, if such election, amendment, settlement, change, extension, filing, or agreement, or other action is reasonably expected to materially increase any Tax liability of any Acquired Company or the Purchaser Group for any Post-Closing Period;
(viii) with respect to the Acquired Companies, incur any indebtedness for borrowed money in excess of $1,000,000 or in respect of which the Purchaser or an Acquired Company would be responsible for repaying after the Initial Closing Date, or assume, guarantee or endorse such obligations of any other Person, or restructurepermit any of the Acquired Assets to become subject to any Encumbrance, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesother than Permitted Encumbrances;
(cix) other than in accordance with benefits outstanding prior the Ordinary Course, issue or enter into any guarantees and bonds;
(x) waive, release or assign any material rights or Claims of the Acquired Companies, or to the extent otherwise constituting, relating to or arising from the Acquired Assets or Assumed Liabilities;
(xi) settle or compromise, or agree to the entry of any Order in respect of, any Claim or Legal Proceeding involving any of the Acquired Assets or Assumed Liabilities or any Acquired Company other than settlements, compromises and Orders which are immaterial or which do not impose any material limitations on the conduct or operation of the Business or include any payment obligations in excess of $500,000 that would be binding on a member of the Purchaser Group or an Acquired Company following the applicable Closing;
(xii) make any new commitment for capital expenditures in excess of $1,000,000 or increase any previous commitment for capital expenditures by greater than $1,000,000 (other than with respect to production tooling which will not exceed an additional $6,000,000 in the aggregate); MASTER ACQUISITION AGREEMENT
(xiii) make any payment to, or enter into any transaction with, any Affiliate other than payment of ordinary compensation to employees or under Material Contracts existing as of the date hereof hereof, the provision of benefits under Employee Benefit Plans existing as of the Company Stock Plansdate hereof, transactions between or among Acquired Companies or otherwise in the Ordinary Course;
(xiv) take any action or fail to take any action that would reasonably be expected to result in a Material Adverse Effect on the Business or the Seller;
(xv) other than as permitted pursuant to subsection (vi) above, enter into any Contract limiting or purporting to limit the ability of the Business to compete in any line of business or with any Person or in any geographic area or during any period of time (excluding any covenants relating to the nonsolicitation of employees or service providers);
(xvi) issue, sell, pledge, dispose of, grant, transfer, encumberencumber or otherwise dispose of any shares of capital stock or other equity securities of any Acquired Company, or authorize the issuancesecurities convertible into or exchangeable for, saleor options, pledgewarrants, dispositioncalls, grant, transfer, lease, license, guarantee commitments or encumbrance ofrights of any kind to acquire, any shares of capital stock or other equity securities of the Acquired Companies or any stock appreciation rights, restricted stock units, stock-based performance units, “phantom” stock awards or other rights that are linked to the value of the common stock or the value of any Acquired Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiespart thereof;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(gxvii) declare, set aside, establish a record date for, make or pay any dividend (other than a dividend of Cash) or other distribution, payable in cash, stock, distribution of any property or otherwise, (other than Cash) with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stockAcquired Company;
(hxviii) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any Acquired Company;
(xix) enter into, approve or recommend, or permit any Acquired Company to enter into, any agreement requiring the Seller or any other member of its Subsidiariesthe Seller Group to abandon, except for sales terminate, delay or rental fail to consummate the Consummated Transactions, or requiring the Seller or any other member of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets Seller Group to fail to comply with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(oxx) except as required pursuant to existing writtenterminate, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adoptwaive, amend or terminate modify any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or paymentprovision of, or fund grant permission under, any standstill, confidentiality agreement or in similar Contract to which any other way secure Acquired Company or member of the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect Seller Group is a party and that relates to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariespotential Alternative Transaction;
(pxxi) take make any action or omit amendment to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;Acquired Companies’ certificates of incorporation, operating agreements or any other organizational and governance documents; MASTER ACQUISITION AGREEMENT
(qxxii) take disclose any action that would violate trade secrets or other material confidential information (other than pursuant to a written confidentiality agreement entered into in the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation Ordinary Course with reasonable protections of, and preserving all rights of the MergerSeller, the Acquired Companies, the Business, and the other members of the Seller Group in such trade secrets and other confidential information) or knowingly receive any trade secrets or other confidential information of any Person in violation of any obligation of confidentiality; or
(sxxiii) agreeauthorize, authorize commit or commit agree to do any of the foregoing.
Appears in 1 contract
Sources: Master Acquisition Agreement (Zebra Technologies Corp)
Interim Operations. The Except (A) as Parent shall otherwise permit (which permission shall not be unreasonably withheld or delayed), (B) as required in order for it to comply with any Law or any contract existing on the date hereof to which the Company or any of its Subsidiaries is bound, (C) as set forth in Section 3.1 of the Company Disclosure Letter, or (D) as otherwise contemplated by this Agreement (including the Recapitalization), the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time Merger Closing:
(unless Parent shall otherwise approve in writinga) and except as required by applicable Laws or as provided for in this Agreement, each the business of the Company and its Subsidiaries shall conduct its business be conducted in the ordinary and usual course and, to the extent consistent with past practice therewith, the Company shall and it shall cause its Subsidiaries to use all reasonable commercial efforts to preserve intact its business organization intact and relationships maintain its existing relations and goodwill with third parties and keep available the services of its present customers, suppliers, distributors, creditors, lessors, officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge it shall not (i) issue, sell, pledge, dispose of or consolidate encumber any share capital owned by it in any of its Subsidiaries; (ii) adopt any change to the Company Company’s and its Subsidiaries’ articles of incorporation or bylaws; (iii) amend the Shareholders Agreement, (iv) split, consolidate, combine or reclassify its issued and outstanding share capital; (v) declare, set aside or pay any dividend payable in cash, shares or property in respect of any share capital other than dividends from its direct or indirect wholly owned Subsidiaries and other than regular quarterly cash dividends; or (vi) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate to purchase or otherwise enter acquire, any share capital or any securities convertible into or exchangeable or exercisable for any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesshare capital;
(c) other than in accordance connection with benefits (i) exercises of Company Warrants or (ii) issuances of shares of Company Common Stock pursuant to options and other share-based awards outstanding prior to on the date hereof under the Company Stock PlansOption Plans or any other Company Benefit Plan, neither it nor any of its Subsidiaries shall (A) issue, sell, pledge, dispose of or encumber any shares of, grant, transfer, encumberor securities convertible into or exchangeable or exercisable for, or authorize options, warrants, calls, commitments or rights of any kind to acquire, any share capital of any class or any other property or assets; (B) other than (i) in the issuanceordinary and usual course of business, sale(ii) dispositions of obsolete assets that are not material to either of the Company’s lines of business, pledge, disposition, grantand (iii) Permitted Asset Sales made pursuant to agreements entered into prior to the date hereof, transfer, lease, license, guarantee guarantee, sell, mortgage, pledge, dispose of or encumbrance of, encumber any shares other property or assets (including share capital of any of its Subsidiaries) or incur or modify any material indebtedness or other liability; or (C) make or authorize or commit for any capital stock expenditures other than in the ordinary and usual course of business consistent with the Company’s budgeted capital expenditures as set forth under “Capital Expenditure Budget” in Section 3.1 of the Company Disclosure Letter (it being understood that the timing of budgeted expenditures may be accelerated or decelerated by the Company), and other than capital expenditures in excess of those reflected in such budget to the extent required in order for the R&B Telephone Company and NTELOS Telephone Inc. to continue to meet their public services obligations to provide reasonable service, or, by any means, except to the extent required by existing contractual commitments, make any significant acquisition of, or investment in, assets or shares of or any its Subsidiariesother interest in, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesPerson;
(d) materially and adversely neither it shall nor shall it cause its Subsidiaries to merge or consolidate with any other Person;
(e) neither it shall nor shall it cause its Subsidiaries to terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Company Benefit Plans or increase the salary, wage, bonus or other compensation of any employees, except amendments required by Law or otherwise necessary to preserve the intended benefits under such Company Benefit Plans and salary increases for employees occurring in the ordinary and usual course of business;
(f) neither it shall nor shall it cause its Subsidiaries to alter its general practices and policies relating to the payment and collection, as the case may be, of accounts payable and accounts receivable, in each case, in any material respect;
(g) neither it shall nor shall it cause its Subsidiaries to settle or compromise any material claims or litigation or modify, amend or terminate any of its Designated Contracts or renew waive, release or assign any Material Contract material rights or claims, except for settlements entered into as set forth in Section 3.1 of the Company Disclosure Schedule, provided that any Contract that would be such settlement shall constitute a Material Contract if full and complete release of related liabilities or obligations by the Company or its applicable Subsidiary and shall not in existence any manner place material restrictions on the date hereof, operations of the Company or such Subsidiary;
(h) it shall use its reasonable commercial efforts to prevent any insurance policy of the Company or its Subsidiaries from being cancelled or terminated prior to the scheduled end of its term;
(i) except neither it shall nor shall it cause its Subsidiaries to enter into any lease or amend an existing lease to increase the obligations under such existing lease (whether of real or personal property) providing for annual rentals of (1) $1,000,000 or more in the ordinary course of business, aggregate per year or (ii2) if consummation $500,000 per year for a period of the transactions contemplated by this Agreement three or compliance more years, and, in each case, is not terminable by the Company with or its Subsidiaries on 90 days’ or less notice without penalty;
(j) neither it shall nor shall it cause its Subsidiaries to enter into any agreement for the provisions purchase of this Agreement will conflict withmaterials, supplies, goods, services, equipment or result other assets that requires either (1) annual payments by the Company and the Subsidiaries of $750,000 or more or (2) aggregate future payments by the Company and the Subsidiaries of $5,000,000 or more, and, in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in each case is not terminable by the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent its Subsidiaries on 90 days’ or less notice without penalty;
(k) neither it shall nor shall it cause its Subsidiaries to enter into any sales, distribution or other similar agreement providing for the sale by the Company or any Subsidiary of materials, supplies, goods, services, equipment or other assets (but not including purchases made under tariff) that requires either (1) annual payments to the Company and the Subsidiaries of $500,000 or more or (2) aggregate future payments over the next two years to the Company and the Subsidiaries of $2,500,000 or more, and, in each case is not terminable by the Company or its Subsidiaries under such Contract; providedon 90 days’ or less notice without penalty;
(l) neither it shall nor shall it cause its Subsidiaries to enter into any partnership, howeverjoint venture or other similar agreement or arrangement, that the foregoing shall not prohibit entering intoexcept for any IRUs, modifying co-location agreement or renewing the Contracts other ordinary course commercial business relationships in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000consistent with past practice;
(em) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of neither it shall nor shall it cause its Subsidiaries on any assets of the Company to incur, assume or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur guarantee any indebtedness for borrowed money (other than capital leases or guarantee such indebtedness in connection with the Debt Financing) other than in the ordinary course of another Personbusiness and in amounts and on terms consistent with past practices, but in any event not exceeding a net total of $2,000,000;
(n) neither it shall nor shall it cause its Subsidiaries to create or issue or sell otherwise incur any debt securities or warrants or material Lien (other rights to acquire than Permitted Liens) on any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred material asset other than in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 as otherwise permitted by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this AgreementDebt Financing;
(o) except as required pursuant neither it shall nor shall it cause its Subsidiaries to existing written(1) enter into any employment, binding agreements deferred compensation, severance, retirement or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) other similar agreement entered into with any director or officer of the Company Disclosure Letter(or any amendment to any such existing agreement), (2) offer of any new severance or termination protection to any director or officer of the Company, or as otherwise required by applicable Law, (i3) grant make or provide authorize a change in compensation or other benefits payable to any director or officer of the Company pursuant to any severance or termination payments retirement plans or benefits policies thereof; provided, however, that the Company and its Subsidiaries shall be permitted to enter into such arrangements with any director, new non-executive officer or employee of the Company any non-executive officer that has been promoted or any of its Subsidiaries, (ii) increase the compensation, bonus had a change in role or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesresponsibilities;
(p) take any action neither it shall nor shall it cause its Subsidiaries to materially change their accounting principles, practices or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfiedmethods, except as required by GAAP or Law;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of neither it shall nor shall it cause its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit enter into an agreement to do any of the foregoing; and
(r) the Company shall use its reasonable best efforts to consummate the Permitted Asset Sales pursuant to their terms.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior Prior to the Effective Time (unless Parent shall otherwise approve in writing) and Time, except as required by applicable Laws set ------------------ forth in the Company Disclosure Letter or as provided for in contemplated by any other provision of this Agreement, unless Sub has consented in writing thereto, the Company:
(i) shall, and shall cause each of the Company and its Subsidiaries shall to, conduct its operations and business in the according to their usual, regular and ordinary course consistent with past practice and it practice;
(ii) shall use reasonable efforts its best efforts, and shall cause each of its Subsidiaries to use its best efforts, to preserve intact its their business organization organizations and relationships with third parties and goodwill, keep available the services of its present their respective officers and employees. Without limiting the generality of the foregoingemployees and maintain satisfactory relationships with those persons having business relationships with them;
(iii) shall not, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit shall cause its Subsidiaries not to:
(a) adopt , amend their respective Articles of Incorporation or propose any change in its articles of incorporation by-laws or bylaws or other applicable comparable governing instruments;
(biv) merge shall promptly notify Sub of (x) any material change in its condition (financial or consolidate otherwise), business, prospects, properties, assets, liabilities or the Company or any normal course of its Subsidiaries with business or of its properties, (y) any other Personmaterial litigation or material governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or restructure, reorganize (z) the breach of any representation or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesseswarranty contained herein;
(cv) other than in accordance with benefits outstanding prior shall promptly deliver to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights Sub correct and complete copies of any kind to acquire any shares of such capital stock report, statement or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company schedule filed with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior SEC subsequent to the date of this Agreement;
(vi) shall not, create or incur any Lien material to the Company or and shall not permit any of its Subsidiaries on to, authorize, propose or announce an intention to authorize or propose, or enter into an agreement with respect to, any assets merger, consolidation or business combination (other than the Merger), release or relinquishment of the Company any material contract rights, or any acquisition or disposition of its Subsidiaries having a value assets or securities in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments 100,000 in any Person (the aggregate other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregatepractice;
(jvii) except as set forth in the capital budgets set forth in Section 6.1(jshall not, and shall not permit any of its Subsidiaries to, (x) of the Company Disclosure Letter and consistent therewithgrant, make confer or authorize award any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or proceduresoptions, except as required to comply withwarrants, or to comply with changes in, GAAP;
(l) settle any litigation conversion rights or other proceedings before a Governmental Entity for an amount in excess rights, not existing on the date hereof, to acquire any shares of $200,000 its capital stock or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses other securities of the Company or its SubsidiariesSubsidiaries or (y) accelerate, including amend or change the period of exercisability of options or restricted stock granted under any employee stock plan or, except as contemplated by Section 4.3(a)(i), authorize cash payments in exchange for any options granted under any of such plans;
(viii) shall not, and shall not permit any of its Subsidiaries to, amend in any material respect the terms of the Benefit Plans, including, without limitation, any employment, severance or similar agreements or arrangements in existence on the date hereof, or adopt any new employee benefit plans, programs or arrangements or any employment, severance or similar agreements or arrangements;
(ix) shall not, and shall not permit any of its Subsidiaries to (x) increase or agree to increase the compensation payable or to become payable to its officers or, other than increases in accordance with past practice which are not material, to its employees or (y) enter into any collective bargaining agreement;
(x) shall not, and shall not permit any of its Subsidiaries to, (x) incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the obligations of any other individual, corporation or other entity or (y) make any loans or advances to any other person, except in the case of clause (x) for borrowings under existing credit facilities in the ordinary course of business and, except in the case of clause (y) for advances consistent with past practice which are not material;
(xi) shall not, and shall not permit any of its Subsidiaries to, (x) materially change any practice with respect to Taxes, (y) make, change or revoke any material Tax election, or (z) settle or compromise any material dispute involving a Tax liability;
(xii) shall not, and shall not permit any of its Subsidiaries to, (x) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its capital stock or other ownership interests or (y) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or capital stock of any of its Subsidiaries, or make any commitment for any such action or (z) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock;
(xiii) shall not, and shall not permit any of its Subsidiaries to, issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock, any other securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities (other than the issuance of shares of Company Common Stock upon the exercise of Company Stock Options outstanding on the date hereof in accordance with their present terms);
(xiv) shall not, and shall not permit any of its Subsidiaries to, make or agree to make any capital expenditure or expenditures with respect to property, plant or equipment which, individually or in a series of related transactions, is in excess of $100,000 or, in the aggregate, are in excess of $500,000 except for sales or rental of inventory as otherwise in the ordinary course of businessbusiness consistent with past practice in order to satisfy actual or expected contractual commitments to customers;
(xv) shall not, sales and shall not permit any of obsolete assets its Subsidiaries to, change any accounting principles or practices;
(xvi) shall not, and salesshall not permit any of its Subsidiaries to, leasespay, licenses discharge, settle or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregatesatisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing writtenpayment, binding agreements discharge or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officerssatisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in the most recent consolidated financial statements (iiior the notes thereto) establish, adopt, amend of the Company included in the Company Reports or terminate any Benefit Plan or amend incurred thereafter in the terms ordinary course of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or paymentbusiness consistent with past practice, or fund waive any material benefits of, or agree to modify in any other way secure the paymentmaterial respect, of compensation any confidentiality, standstill, non-solicitation or benefits under any Benefit Plan, similar agreement to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;Subsidiary is a party; and
(pxvii) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII shall not, and shall not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely take, or agree (in writing or otherwise) or resolve to prevent the consummation of the Merger; or
(s) agreetake, authorize or commit to do any of the foregoingforegoing actions.
Appears in 1 contract
Sources: Merger Agreement (MTL Inc)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writinga) and except as required by applicable Laws or as provided for in this Agreement, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from From the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted required by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld Law or delayed) or (C) as set forth in Section 6.1 5.2(a) of the Company Disclosure LetterSchedule, unless Parent has consented in writing thereto, the Company will not shall, and will not permit shall cause its Subsidiaries to:
(ai) adopt conduct its operations according to its ordinary course of business consistent with past practice and in compliance in all material respects with all applicable Laws; (ii) use its commercially reasonable efforts to preserve intact its business organizations and goodwill, keep available the services of its officers, employees and consultants, and maintain satisfactory relationships with those Persons having business relationships with them; (iii) upon the discovery thereof, promptly notify Parent of the existence of any breach of any representation or propose warranty contained herein (or, in the case of any change representation or warranty that makes no reference to Company Material Adverse Effect or materiality, any breach of such representation or warranty in any material respect) or the occurrence of any event that would cause any representation or warranty contained herein no longer to be true and correct (or, in the case of any representation or warranty that makes no reference to Company Material Adverse Effect or materiality, to no longer be true and correct in any material respect); (iv) promptly deliver to Parent true and correct copies of any report, statement or schedule filed with the SEC subsequent to the date of this Agreement; and (v) pay its articles of incorporation or bylaws or other applicable governing instruments;Taxes when due.
(b) merge From and after the date of this Agreement until the Effective Time, except as may be required by Law or consolidate any pre-existing contractual obligation, and except as set forth in Section 5.2(b) of the Company Disclosure Schedule, unless Parent has consented in writing thereto (which consent shall not be unreasonably withheld or delayed), the Company shall not, and shall cause its Subsidiaries not to: (i) amend its Amended Articles of Incorporation or Amended and Restated By-Laws; (ii) offer, issue, sell or pledge any shares of its capital stock or other ownership interest in the Company or its Subsidiaries, or any securities convertible into or exchangeable for any such shares or ownership interest, or any rights, warrants or options to acquire or with respect to any such shares of capital stock, ownership interest, or convertible or exchangeable securities other than pursuant to the Company's existing employee benefits plans; (iii) effect any stock split or otherwise change its capitalization as it exists on the date hereof; (iv) grant, confer or award any option, warrant, convertible security or other right to acquire any shares of its or its Subsidiaries' capital stock; (v) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its capital stock or other ownership interests (other than such payments by the Subsidiaries to the Company); (vi) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or capital stock of its Subsidiaries with or any other Person, securities that are convertible into or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, exchangeable for any shares of capital stock of the Company or any its Subsidiariesof, or securities convertible or exchangeable into or exercisable for any shares of such capital stockother equity interests in, or any outstanding options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result other equity interests in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices ; (ivii) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divesttransfer, cancel, abandon or allow to lapse or expire exchange or otherwise dispose of any of its properties or assets, product lines whether tangible or businesses of the Company or its Subsidiaries, intangible (including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate), other than pursuant to Contracts in effect prior to the date sale or disposition of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, inventory in the ordinary course of business consistent with past practice or the sale, lease or other disposition of assets which individually or in the aggregate, are obsolete or not material to the Company and its Subsidiaries taken as a whole; (iiiviii) acquire by merger or consolidation with, by purchase of any equity interest of or by any other manner, any business or entity or otherwise acquire any assets, except for purchases of inventory, supplies or capital equipment in the ordinary course of business; (ix) incur or assume any long-term or short-term debt, except for working capital purposes and the purchase of capital equipment in the ordinary course of business under the Credit Facility; (x) assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except its Subsidiaries; (xi) make or forgive any loans, advances or capital continuations to, or investments in, any other Person other than advances to officers or employees in the ordinary course of business consistent with past practice; (xii) increase the compensation (or benefits) payable to or to become payable to any director, officer or other employee, except for payments of bonuses not to exceed the amounts set forth on Section 5.2(b) of the Company Disclosure Schedule, increases in salary or wages of non-officer employees in the ordinary course of business and consistent with past practice or pursuant to any existing employment agreements of the Company; (xiii) establish, adopt, amend enter into, materially amend, or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation rights or benefits under any Benefit collective bargaining agreement or any Plan; (xiv) effect any reorganization or recapitalization; (xv) pay, to discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of $250,000 individually and $500,000 in the extent not already provided aggregate, other than the payment, discharge, settlement or satisfaction in any such Benefit Planthe ordinary course of business or in accordance with their terms, of liabilities disclosed, reflected or reserved against in the most recent consolidated financial statements (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vinotes thereto) forgive any loans to directors, officers or employees of the Company included in the Company SEC Reports or incurred since the date of such financial statements in the ordinary course of business, or cancel any indebtedness in excess of its Subsidiaries;
$50,000 individually and $500,000 in the aggregate; (pxvi) take any action that would reasonably be expected to: (A) prevent, impair or omit materially delay the ability of the Company, Parent or Merger Sub to take any action that is reasonably likely to result in consummate the Merger or (B) cause any of the conditions to the consummation of the Merger set forth not to be satisfied; (xvii) make or change any Tax election, file any amended Tax Return, enter into any closing agreement, settle or compromise any liability with respect to Taxes, agree to any material adjustment of any Tax attribute, file any claim for a refund of Taxes, or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment; or (xviii) agree in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take writing or permit any of its Subsidiaries otherwise to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoingforegoing actions.
Appears in 1 contract
Sources: Agreement and Plan of Merger (DRS Technologies Inc)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior (a) Prior to the Effective Time (unless Parent shall otherwise approve in writing) and Time, except as required by applicable Laws set forth in the OPC Disclosure Letter or as provided for in contemplated by any other provision of this Agreement, unless USPI has consented in writing thereto, OPC:
(i) Shall, and shall cause each of the Company and its Subsidiaries shall to, conduct its business in the operations according to their usual, regular and ordinary course consistent with past practice in substantially the same manner as heretofore conducted;
(ii) Shall use its reasonable efforts, and it shall cause each of its Subsidiaries to use its reasonable efforts efforts, to preserve intact its their business organization organizations and relationships with third parties and goodwill, keep available the services of its present their respective officers and employees. Without limiting employees and maintain satisfactory relationships with those persons having business relationships with them;
(iii) Shall not amend its Certificate of Incorporation or Bylaws;
(iv) Shall promptly notify USPI of any material emergency or other material change in its condition (financial or otherwise), business or results of operations, any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the generality same may be contemplated), or the breach in any material respect of any representation or warranty contained herein;
(v) Shall not (x) except pursuant to the foregoingexercise of options, from warrants, conversion rights and other contractual rights existing on the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by hereof and disclosed pursuant to this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, issue any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, effect any stock split or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence otherwise change its capitalization as it existed on the date hereof, (iy) grant, confer or award any option, warrant, conversion right or other right not existing on the date hereof to acquire any shares of its capital stock, (z) increase any compensation or enter into or amend any employment agreement with any of its present or future officers or directors, except in the ordinary course of businessfor normal increases consistent with past practice, or (iiaa) if consummation of the transactions contemplated by this Agreement adopt any new employee benefit plan (including any stock option, stock benefit or compliance by the Company with the provisions of this Agreement will conflict with, stock purchase plan) or result amend any existing employee benefit plan in any violation or breach ofmaterial respect, or default (with or without notice or lapse of time or both) under, or give rise except for changes which are less favorable to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result participants in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000plans;
(evi) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
Shall not (f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(gx) declare, set aside, make aside or pay any dividend or make any other distribution, payable in cash, stock, property distribution or otherwise, payment with respect to any shares of its capital stock or (y) except in connection with the use of shares of capital stock of to pay the exercise price or tax withholding in connection with its Subsidiaries (except for dividends paid by any direct stock-based employee benefit plans, directly or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or indirectly redeem, purchase or otherwise acquire, directly or indirectly, acquire any shares of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, or make any commitment for any such action; and
(vii) Shall not, and shall not permit any of its Subsidiaries to sell, lease or otherwise dispose of any of its assets (including capital stock of Subsidiaries) which are material, individually or in the aggregate, except for sales or rental of inventory in the ordinary course of business.
(viii) Shall take commercially reasonable efforts to reconcile the accounts receivable accounts at two of the managed physician practices, sales pursuant to the terms previously agreed to by OPC and USPI.
(b) Prior to the Effective Time, except as set forth in the USPI Disclosure Letter or as contemplated by any other provision of obsolete assets and salesthis Agreement, leasesunless OPC has consented in writing thereto, licenses USPI:
(i) Shall conduct its operations in the ordinary course in substantially the same manner as heretofore conducted;
(ii) Shall not amend its Certificate of Incorporation;
(iii) Shall promptly notify OPC of any material emergency or other dispositions material change in its condition (financial or otherwise), business or results of operations, any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or the breach in any material respect of any representation or warranty contained herein;
(iv) Shall not sell, lease or otherwise dispose of any of its assets with a fair market value not in excess (including capital stock of $250,000 Subsidiaries) which are material, individually or in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, business;
(v) change Shall not redeem, purchase or otherwise acquire, or propose to redeem, purchase or acquire, a material amount of the outstanding USPI Class A Common Stock or USPI Common Stock;
(vi) Shall not (i) except pursuant to the exercise of options, warrants, conversion rights and other contractual rights existing on the date hereof and disclosed pursuant to this Agreement (including, specifically, contractual rights granted to the holder of the USPI Class B Common Stock), issue any actuarial shares of its capital stock at a purchase price of less than $4.50 per share of USPI Common Stock, or (ii) grant, confer or award any option, warrant, conversion right or other assumptions used right not existing on the date hereof to calculate funding obligations acquire any shares of its capital stock at a purchase price of less than $4.50 per share of USPI Common Stock.
(vii) Shall not declare or make any extraordinary distributions with respect to any Benefit Plan its capital stock, which distributions are individually, or to change in the manner in which contributions to such plans are made or the basis on which such contributions are determinedaggregate, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoingmaterial.
Appears in 1 contract
Sources: Merger Agreement (United Surgical Partners International Inc)
Interim Operations. The Company covenants and agrees (a) During the Pre-Closing Period, except (i) as otherwise contemplated by this Agreement, (ii) as set forth in Section 5.2(a) of the Seller Disclosure Schedule, (iii) as Purchaser shall otherwise agree in writing in advance (which consent shall not be unreasonably withheld, delayed or conditioned), (iv) as required by any Contract or Permit which has been disclosed to itself and its Subsidiaries that, after the date hereof and Purchaser prior to the Effective Time date of this Agreement, (unless Parent shall otherwise approve in writingv) and except as required by applicable Laws Law or GAAP or (vi) as provided for in this Agreementrequired by the COVID-19 Measures, each of the Company Seller Parent (x) shall conduct, and shall cause its Subsidiaries shall conduct its business to conduct, the Business in the ordinary course Ordinary Course, (y) to the extent consistent with past practice clause (x), shall use, and it shall use cause its Affiliates to use, commercially reasonable efforts to maintain and preserve intact its business organization the current organization, material assets, Permits (other than Shared Permits) and relationships and goodwill of key Business Employees, customers, suppliers, regulators and others having material business relationships with third parties the Business and keep available the services of its present officers and employees. Without (z) without limiting the generality of the foregoing, from shall not, and shall cause each of its Subsidiaries not to, in each case in relation to the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 conduct of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries toBusiness:
(ai) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, encumber or authorize the issuance, sale, pledge, disposition, grant, transfer, encumbrance or exercise of any Sold Securities;
(ii) sell, lease, license, guarantee transfer or encumbrance ofdispose of any (A) Transferred Assets other than Business IP or inventory sold in the Ordinary Course; (B) material Business IP or, within the scope of the Business, any shares licensed Business IP, other than non-exclusive licenses granted in the Ordinary Course or abandonment or lapse of capital stock of Registered Business IP in the Company Ordinary Course; or any its Subsidiaries, (C) Owned Real Property or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesLeased Real Property;
(diii) materially and adversely modifyacquire any material assets or material business of another Person (whether by merger, terminate consolidation, acquisition of stock or renew any Material Contract assets or any Contract that would be a Material Contract if otherwise) other than (A) in the Ordinary Course or (B) pursuant to existing Contracts in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise and provided to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000Purchaser;
(eiv) except pursuant (A) amend or propose to Contracts in effect prior to amend the date Organizational Documents of this Agreement, create or incur any Lien material to the Sold Company or any of its Subsidiaries on any assets of (B) cause the Sold Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make aside or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect distribution to any of its capital stock or the capital stock of its Subsidiaries Person (except for any such cash dividends paid or distributions in amounts reasonably necessary to facilitate the elimination of Intercompany Accounts as contemplated by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stockthis Agreement);
(hv) grant or permit any Encumbrance (other than as required by Section 5.1(r), reclassify, split, combine, subdivide Permitted Encumbrances) on any Transferred Asset or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money outstanding or any guarantee for such indebtedness of another Person, Person or issue or sell or have outstanding any debt securities or warrants or other rights to acquire any debt security of the Company or any of its SubsidiariesSold Company, in each case, that would be an Assumed Liability, except for indebtedness for, in each case, (A) Intercompany Accounts among the Seller and the Sold Company to be eliminated in accordance with Section 5.20, (B) Indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregateOrdinary Course, (iiC) indebtedness in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company replaced or (ivD) interest rate swaps on customary commercial terms consistent with past practice and not indebtedness that will be repaid or extinguished at or prior to exceed $250,000 of notional debt in the aggregateClosing;
(jvi) except (A) as set forth in required by the capital budgets set forth in Section 6.1(j) terms of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure Benefit Plans currently in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply witheffect, or to comply with changes in, GAAP;
(lB) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (iy) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) materially increase the compensationcompensation or consulting fees, bonus or bonus, pension, welfare, fringe or other benefits, severance or other benefits of, termination pay of any bonus toBusiness Employee, or (z) amend in any material respect any Assumed Plan, in each case, other than (1) changes to Benefit Plans that are not Assumed Plans that are not targeted at Business Employees, (2) changes in connection with any annual renewal or reenrollment of health and welfare plans and (3) annual salary (and corresponding bonus) increases not to exceed 3% in the aggregate for the U.S. (or the applicable country salary increase budget as determined by Seller Parent), individual market-competitive salary adjustments to retain critical talent, and job level promotions due to changes in individual job responsibilities;
(vii) other than as contemplated by Section 6.1(a), transfer any Business Employee into or out of the Sold Company, or transfer the employment of any employee to a position in which such employee would no longer be a Business Employee;
(viii) settle any material Proceeding principally affecting the Business other than if the Damages resulting from such waiver, release, assignment settlement or compromise involves solely the payment of cash and such amount is paid prior to the Closing;
(ix) make any new equity awards change in any method of accounting or accounting practice or auditing practice applicable to the Business other than changes (A) as may be initiated by Seller Parent with respect to its business generally or (B) as may be appropriate to conform to GAAP or applicable Law;
(x) either (i) accelerate collection of any directoraccount receivable relating to the Business in advance of its due date, officer or employee (ii) delay payment of any account payable relating to the Business beyond its due date, in each case, with the primary purpose of affecting the calculation of the Estimated Purchase Price to be set forth in the Estimated Closing Statement;
(xi) adopt any partial or complete plan of liquidation, dissolution or winding down with respect to the Sold Company or Seller;
(xii) except as required by applicable Law or as contemplated by this Agreement, make or change any material Tax election, adopt or change any method of its SubsidiariesTax accounting, exceptamend any Tax Returns or settle any Tax claim, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Planeach case, to the extent not already provided in any such Benefit Plan, action would both (vA) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees outside of the Company or Ordinary Course and (B) reasonably be expected to have the effect of increasing the Tax liability of Purchaser for any of its Subsidiariesperiod ending after the Closing Date;
(pxiii) take any action in each case other than in the Ordinary Course, enter into, amend or omit to take any action that is reasonably likely to result modify in any of the conditions material respect or terminate any Material Contract (or any Contract that would be a Material Contract if entered into prior to the Merger set forth in Article VII not being satisfied;
(qdate hereof) take or Transferred Lease, or otherwise waive, release or assign any action that would violate the CIA;
(r) knowingly take material rights, claims or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Mergerbenefits thereto; or
(sxiv) agree, authorize or commit enter into any agreement or obligation to do undertake any of the foregoing.
(b) Nothing contained in this Agreement shall give either Party, directly or indirectly, the right to control or direct the other Party’s operations prior to the Closing Date.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from Between the date of this Agreement until and the Closing or the earlier termination of this Agreement in accordance with Article IX, except as set forth on Schedule 7.1 or as expressly required by this Agreement, unless Buyer has previously consented in writing or as required by applicable Law, the Company will (i) conduct its operations in the Ordinary Course of Business and (ii) use commercially reasonable efforts to preserve present relationships with customers, suppliers, co-packers, vendors, distributors, employees and lenders having business dealings with the Company (it being understood that, for the avoidance of doubt, prior to the Effective Time, the Company may use all available cash to repay any Company Debt). Without limiting the foregoing, between the date of this Agreement and the Closing or the earlier termination of this Agreement in accordance with Article IX, except (A) as otherwise set forth on Schedule 7.1 or as expressly permitted required by this Agreement, (B) as Parent may approve unless Buyer has previously consented in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letterrequired by applicable Law, the Company will shall not and will not permit its Subsidiaries todo any of the following:
(a) adopt incur any Company Debt or propose issue any change in its articles long-term debt securities or assume, guarantee or endorse such obligations of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for indebtedness incurred in the Ordinary Course of Business under lines of credit existing on the date hereof, which will be paid off at the Closing and included in Company Debt;
(i) except in the Ordinary Course of Business, sell, transfer, assign, lease, license, abandon or restructuredispose of, reorganize any material property or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations (ii) mortgage or businessesencumber, or subject to any Lien, any property or assets other than Permitted Liens incurred in the Ordinary Course of Business, or (iii) cancel any debts owed to or claims held by the Company;
(c) other than in accordance with benefits outstanding prior to the date hereof under Ordinary Course of Business, enter into, amend, modify, renew, cancel or terminate any Material Contract; provided that the Company Stock Plansshall be permitted to extend, issue, sell, pledge, dispose of, grant, transfer, encumber, renew or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee replace any such Material Contract with one or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesmore Contracts on substantially similar terms;
(d) materially and adversely modifyenter into, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereofadopt, (i) except in the ordinary course of businessamend, terminate, or increase the amount benefits or compensation (iiincluding any bonus) if consummation due under any Employee Plan or other benefit or compensation plan, program, Contract, or arrangement, including any agreement relating to the compensation or severance of any employee of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict withCompany, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business except to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000required by Law;
(e) except pursuant to Contracts in effect prior make any change to the date of this AgreementCompany’s accounting methods, create principles or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determinedpractices, except as may be required by GAAP; GAAP or changes in Law;
(f) make or change any material Tax election, change an annual accounting period, or adopt or change any accounting method;
(g) make any amendment (whether by merger, consolidation or otherwise) to the Company’s Organizational Documents;
(h) issue, redeem, pledge, deliver, grant, sell, or otherwise dispose of any Equity Interests or options, warrants, calls, subscriptions or other rights to purchase or redeem any Equity Interests of the Company, or issue or declare any non-cash dividends or distributions with respect thereto, or split, combine, reclassify or subdivide the Equity Interests of the Company, or otherwise change the capital structure of the Company;
(i) directly or indirectly, acquire by merger or consolidation with, or merge or consolidate with, or purchase substantially all of the assets or otherwise acquire any assets or business of, or acquire any equity interests in, any Person;
(j) (i) initiate any Action or (viii) forgive enter into any loans settlements or compromises of any Actions, if such settlements or compromises would involve (x) the imposition of any material non-monetary restrictions upon the Company, or (y) any payment in excess of $100,000;
(k) allow any material insurance policies to directorslapse, officers without renewal or employees replacement on commercially reasonable terms;
(l) make any material loans, advances or capital contributions to, or material investments in, any other Person;
(m) make capital expenditures in excess of $500,000, in the aggregate;
(n) dispose of (whether by transfer, merger, consolidation, disposition of stock or assets or otherwise), directly or indirectly, any material assets, properties or businesses, other than (i) the sale of inventory in the Ordinary Course of Business or (ii) the sale or disposal of obsolete or excess equipment in the Ordinary Course of Business;
(o) create any Subsidiary of the Company or any of its SubsidiariesCompany;
(p) take (i) adopt a plan of agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization or (ii) file a bankruptcy petition under any action provisions of federal or omit to take any action that is reasonably likely to result in any state bankruptcy law on behalf of the conditions Company or consent to the Merger set forth in Article VII not being satisfiedfiling of any bankruptcy petition against the Company under any similar law;
(q) take any action that would violate materially delay, decrease, or increase the CIA;rate of promotional or marketing expenditures, other than in the ordinary course of business; or
(r) knowingly take authorize, agree or permit any of its Subsidiaries commit to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agreeactions described in the foregoing sub-clauses of this Section 7.1. Nothing contained in this Section 7.1 or elsewhere in this Agreement shall preclude the Company, authorize or commit in its sole discretion, from making cash distributions to do any of Seller prior to the foregoingEffective Time using available cash on hand and without otherwise violating this Section 7.1.
Appears in 1 contract
Sources: Securities Purchase Agreement (Hormel Foods Corp /De/)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing) ), the business of it and its Subsidiaries shall be conducted in the ordinary course of business and, to the extent consistent therewith, it and its Subsidiaries shall consistent with past practice preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, and lessors, and, shall not terminate without cause any of its and its Subsidiaries’ present officers, employees and agents, except as otherwise expressly contemplated by this -40- Agreement or as required by applicable Laws or as provided for in this Agreement, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employeesLaw. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the Effective Time, except as otherwise expressly (A) as otherwise expressly permitted required or contemplated by this Agreement, (B) required by applicable Law, (C) as Parent may approve approved in writing by Parent (such approval not to be unreasonably withheld withheld, conditioned or delayed) or (CD) as set forth in on Section 6.1 6.1. of the Company Disclosure Letter, the Company will not and will not permit cause its Subsidiaries not to:
(ai) adopt or propose any change in its articles certificate of incorporation or bylaws or other applicable comparable governing instrumentsdocuments or, solely with respect to the Company, change its jurisdiction of incorporation or enter into a reorganization where it becomes a wholly-owned Subsidiary of an entity incorporated in a different jurisdiction;
(bii) merge or consolidate the Company itself or any of its Subsidiaries with any other Person, except for any such transactions among its wholly owned Subsidiaries, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(ciii) acquire assets outside of the ordinary course of business from any other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, Person;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance Encumbrance of, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of its capital stock or of the Company or any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
securities (d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if except for the issuance of shares in existence on respect of Company Options outstanding as of the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict within accordance with their terms and, or result in any violation or breach ofas applicable, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts Stock Plan as in effect prior to as of the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000);
(fv) make any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than to or from the Company or and any direct or indirect wholly-of its wholly owned Subsidiary of the CompanySubsidiaries) in excess of $50,000 125,000 in the aggregate;
(gvi) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-wholly owned Subsidiary to the Company it or to any other direct or indirect wholly-wholly owned Subsidiary) or enter into any agreement , declared and paid at such times and in such amounts as is consistent with respect historical practice over the 12 month period prior to the voting date of such capital stockthis Agreement);
(hvii) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such its capital stock, except stock (other than the withholding of shares to satisfy withholding Tax obligations in respect of Company Options outstanding as of the date of this Agreement in accordance with cashless exercise provisions of rights granted prior to their terms and, as applicable, the date hereof under the Company Stock PlansPlan);
(iviii) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness Indebtedness (including the issuance of another Person, or issue or sell any debt securities or securities, warrants or other rights to acquire any debt security of the Company or any of its Subsidiariessecurity), except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (iA) not to exceed $200,000 in the aggregate, (ii) Indebtedness in replacement of existing indebtedness Indebtedness for borrowed money on terms substantially consistent with or more beneficial favorable to the Company than the indebtedness Indebtedness being replaced, replaced or (iiiB) guarantees of Indebtedness of its wholly owned Subsidiaries otherwise incurred in compliance with this Section 6.1 by this
(ix) make or authorize any payment of, or accrual or commitment for, capital expenditures other than capital expenditures made in connection with the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and Company’s Irish grant project, in an amount not to exceed €400,000;
(x) other than in the ordinary course of business, enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement or amend, modify, supplement, waive, terminate, assign, convey, encumber or otherwise transfer, in whole or in part, rights or interest pursuant to or in any Material Contract, other than expirations of any such Contract in the ordinary course of business in accordance with the terms of such Contract, or cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $250,000 of notional debt 125,000 in the aggregate;
(jxi) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewithsettle any action, make suit, claim, hearing, arbitration, investigation or authorize any capital expenditure other proceedings for an amount in excess of $200,000 125,000 in the aggregate during or any 12 month periodobligation or liability of it in excess of such amount or on a basis that would result in the imposition of any writ, judgment, decree, settlement, award, injunction or similar order of any Governmental Entity that would restrict the future activity or conduct of the Company or any of its Subsidiaries or a finding or admission of a violation of Law or violation of the rights of any Person or that is brought by any current, former or purported holders of any capital stock or debt securities of the Company or any of its Subsidiaries relating to the Merger or the other transactions contemplated by this Agreement;
(kxii) make any changes with respect to accounting policies or procedures, except as required to comply with, by changes in GAAP or to comply with changes in, GAAPIFRS;
(lxiii) settle enter into any litigation or line of business in any geographic area other proceedings before a Governmental Entity for an amount in excess than the existing lines of $200,000 or any obligation or liability business of the Company and its Subsidiaries and lines of products and services reasonably ancillary to any existing line of business, in excess any geographic area for which a Permit (if one is required) authorizing the conduct of such amountbusiness, product or service in such geographic area is held by it or any of its Subsidiaries or, except as currently conducted, engage in the conduct of any business in any jurisdiction that would require the receipt or transfer of any Permit issued by any Governmental Entity that would reasonably be expected to prevent, impair or materially delay the ability of the Company to consummate the Merger and the other transactions contemplated by this Agreement;
(mxiv) make, change or revoke any Tax election, change an annual Tax accounting period, adopt or change any material Tax election or Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any Tax claim, audit, assessment or fail dispute, surrender any right to timely claim a refund of a material amount of Taxes, take any action that is reasonably likely to result in an increase in the Tax liability of the Company or its -42- Subsidiaries or, in respect of any taxable period (taking into account all applicable extensionsor portion thereof) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before ending after the Closing Date, the Tax liability of Parent or its Affiliates;
(nxv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire cancel or otherwise dispose of, or permit or suffer to exist the creation of any Encumbrance upon, any assets, product lines or businesses of the Company it or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in connection with services provided in the ordinary course of business, business and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets (not including services) with a fair market value not in excess of $250,000 125,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(oxvi) (A) sell, assign, transfer or otherwise dispose of any Intellectual Property Rights to any Person, (B) grant any license, covenant not to ▇▇▇, release, waiver or other right under any Company Intellectual Property to any Person, (C) cancel, abandon or allow to lapse or expire any Registered IP or (D) omit to take any action which adversely affects or could adversely affect any Company Intellectual Property;
(xvii) except as required pursuant to existing written, binding agreements or policies the terms of any Company Benefit Plan in effect prior to as of the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure LetterAgreement, or as otherwise required by applicable Law, ,
(i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (iiA) increase in any manner the compensationcompensation or consulting fees, bonus or bonus, pension, welfare, fringe or other benefits, severance or other benefits oftermination pay of any Company Employee, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of except for
(1) employees who are not officers, increases in annual salary or wage rate in the ordinary course of business consistent with past practice that do not exceed 10% individually or 5% in the aggregate and (2) the payment of annual bonuses for completed periods based on actual performance in the ordinary course of business, (iiiB) become a party to, establish, adopt, amend amend, commence participation in or terminate any Company Benefit Plan or any arrangement that would have been a Company Benefit Plan had it been entered into prior to this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoing.,
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. The (a) Except as (1) set forth in the Company covenants and agrees Disclosure Schedule delivered to Parent as to itself and its Subsidiaries that, after of the date hereof and prior to the Effective Time hereof, (unless Parent shall otherwise approve in writing2) and except as required expressly contemplated or permitted by applicable Laws or as provided for in this Agreement, each of or (3) required by Law, during the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, period from the date of this Agreement until to the earlier of the Effective TimeTime or the termination of this Agreement in accordance with Article 7, except the Company shall and shall cause its subsidiaries to: (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve conduct its business in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing all material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, respects in the ordinary course of business consistent with past practice and (B) use its reasonable best efforts to maintain and preserve substantially intact its business organization and the goodwill of those having business relationships with it.
(b) Without limiting the generality of the foregoing, and except as (1) set forth in the Company Disclosure Schedule delivered to Parent as of the date hereof, (iii2) establishexpressly contemplated or permitted by this Agreement, adoptor (3) required by Law, amend during the period from the date of this Agreement to the earlier of the Effective Time or terminate the termination of this Agreement in accordance with Article 7, the Company shall not and shall not permit its subsidiaries to:
(i) (A) authorize for issuance, issue, deliver, sell or agree or commit to issue, sell or deliver (whether through the issuance or granting of options, commitments, subscriptions, rights to purchase or otherwise), pledge or otherwise encumber any Benefit Plan shares of its capital stock, any other securities or amend any securities convertible into, or any rights, warrants or options to acquire, any such shares, securities or convertible securities or any other securities or equity equivalents (including without limitation stock appreciation rights or phantom interests), except for issuances of Common Shares upon the terms exercise of Options outstanding as of the date hereof or (B) repurchase, redeem or otherwise acquire any shares of its capital stock or other equity interests (including, without limitation, securities exchangeable for, or options, warrants, calls, commitments or rights of any outstanding equity-based awardskind to acquire, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial capital stock or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees equity interests of the Company or any of its Subsidiariessubsidiaries) (it being acknowledged and agreed that, notwithstanding anything to the contrary contained in the Company Disclosure Schedule, the Company shall not, and shall cause its subsidiaries not to, take, enter into or engage in any respect in any of the actions referred to in this clause (i));
(pii) (A) sell, transfer or pledge, or agree to sell, transfer or pledge, any equity interest owned by it in any of its subsidiaries or alter through merger, liquidation, reorganization, restructuring or in any other fashion the corporate structure or ownership of any of its subsidiaries, (B) amend or otherwise change its Certificate of Incorporation or Bylaws or equivalent organizational documents, (C) split, combine or reclassify any shares of its capital stock or (D) amend, or grant any waiver under, any rights plan, “poison pill” or similar arrangement adopted by the Company (except with respect to Parent or any of its affiliates);
(iii) declare, set aside or pay any dividends on (whether in cash, stock or property), or make any other distributions in respect of, any of its capital stock (except for dividends paid by direct or indirect wholly owned subsidiaries to the Company with respect to capital stock) (it being acknowledged and agreed that, notwithstanding anything to the contrary contained in the Company Disclosure Schedule, the Company shall not, and shall cause its subsidiaries not to, take, enter into or engage in any respect in any of the actions referred to in this clause (iii));
(iv) (A) grant or agree to any increase in any manner the compensation or fringe benefits of, or pay any bonus or other compensation to, any current or former director, officer or employee except for (1) increases and bonuses expressly contemplated by or required under existing employment agreements, bonus plans and other agreements and arrangements as in effect as of the date hereof listed in Section 5.01(b)(iv)(A)(1) of the Company Disclosure Schedule and (2) for normal annual or other periodic individual increases in base salary or hourly wages to employees earning non-contingent cash compensation of less than $100,000 per annum in the ordinary course of business consistent with past practice; (B) subject to the exceptions to the covenants set forth in clause (A) of this Section 5.02(b)(iv), enter into any new or amend any existing employment, severance or termination or change in control agreement with any current or former director, officer or employee; (C) become obligated under any Benefit Plan that was not in existence on the date hereof or amend, modify or terminate any Benefit Plan or other employee benefit plan or any agreement, arrangement, plan or policy for the benefit of any current or former director, officer or employee in existence on the date hereof; (D) permit any officer or employee to rescind, withdraw or amend or modify in any respect any pending or announced retirement or any resignation (or the terms and conditions thereof) heretofore submitted to the Company or any of its subsidiaries; (E) hire any employee, except (1) to replace or fill a vacancy of any employee of the Company or any of its subsidiaries which occurred prior to the date hereof (each of which is listed on Section 5.01(b)(iv)(E)(1) of the Company Disclosure Schedule) or to fill a vacancy of any employee of the Company or its subsidiaries which occurs subsequent to the date hereof due to the voluntary resignation by any such employee earning annual non-contingent cash compensation of less than $100,000 per annum subsequent to the date hereof, (2) to satisfy contractual obligations existing as of the date hereof and set forth on Section 5.01(b)((iv)(E)(2) of the Company Disclosure Schedule, (3) to hire for the positions of Divisional Merchandise Manager-Home and Art Design Manager on reasonable and customary terms that are consistent with past practice, which terms shall not, in any event, provide for the making of any change-of-control bonus or payment or any similar payment to any such person, whether in connection with his termination or otherwise, (4) to hire and replace any hourly or secretarial employee, in each case, on reasonable and customary terms consistent with past practice, which terms shall not, in any event, provide for the making of any change-of-control bonus or payment or any similar payment to any such person, whether in connection with his termination or otherwise, or (5) with the prior written consent of Parent, to hire any other employee; or (F) pay any benefit not required by any plan or arrangement as in effect as of the date hereof (including, without limitation, the granting of, acceleration of, exercisability of or vesting of stock options, stock appreciation rights or restricted stock, except as otherwise contemplated by this Agreement);
(v) acquire or agree to acquire, including, without limitation, by merging or consolidating with, or purchasing all or substantially all the assets or capital stock or other equity interests of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, other than purchases of inventory or supplies or other assets in the ordinary course of business consistent with past practice;
(vi) sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, or agree to sell, lease, license, mortgage or otherwise encumber or subject to any Lien or otherwise dispose of, any of its properties or assets other than (A) immaterial properties or assets (or immaterial portions of properties or assets) and (B) in the ordinary course of business consistent with past practice;
(vii) other than the incurrence of indebtedness under the Company’s existing revolving credit facility with PNC Capital Markets and guaranties of real property leases in the ordinary course of business with any person not affiliated with any officer, director or employee of the Company or its subsidiaries, create, incur, assume or modify in any material respect any indebtedness for borrowed money, or issue any note, bond or other debt security, or guarantee any indebtedness, or make any loans, advances (other than advances to employees of the Company or any subsidiary in the ordinary course of business consistent with past practice) or capital contributions to or investments in any other Person other than to any of the Company and its subsidiaries, except for indebtedness other than indebtedness for borrowed money in an amount not in excess of $250,000 in the aggregate and indebtedness to the Company’s merchandise suppliers for products purchased in the ordinary course of business consistent with past practice;
(viii) make or forgive any loans, advances or capital contributions to, guarantees for the benefit of, or investments in, any person or entity (other than loans between or among the Company and any of its wholly-owned subsidiaries);
(ix) assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person, except for the obligations of the subsidiaries of the Company permitted under this Agreement;
(x) adopt or put into effect a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries (other than the Transactions);
(xi) (A) enter into, amend, modify or supplement any Material Contract or License Agreement outside of the ordinary course of business consistent with past practice (except as may be necessary for the Company to comply with its obligations hereunder) or (B) waive, release, grant, assign or transfer any of its material rights or claims (whether such rights or claims arise under a Material Contract, License Agreement or otherwise);
(xii) authorize or make any capital expenditures that are not set forth in the 2007 approved budget or in excess of $100,000 in the aggregate for the Company and its subsidiaries taken as a whole or any Expenses in connection with the Transactions, other than those expenses (A) payable to the Persons set forth on Section 3.20 of the Company Disclosure Schedule pursuant to contractual arrangements as in effect as of the date hereof, (B) reasonably incurred actual fees and expenses payable to the Company’s outside legal counsel for services rendered in connection with the Transactions (including any litigation with respect thereto) and (C) other reasonably incurred actual fees and expenses for services rendered in connection with the Transactions (e.g., printing, proxy solicitation, etc.), but excluding, for avoidance of doubt, any Expenses paid or payable to any current or former employee, officer or director of the Company or any of its subsidiaries;
(xiii) fail to continue insurance coverages that cover risks of such types and in such amounts as are consistent with the Company’s past practices;
(xiv) enter into, amend, modify or supplement any agreement, transaction, commitment or arrangement with any current or former officer, director, employee or other affiliate of the Company or any of its subsidiaries (or any affiliate of any of the foregoing) other than agreements, transactions, commitments and arrangements (A) permitted by Section 5.01(b)(iv)(B) hereof or (B) as otherwise expressly contemplated by this Agreement;
(xv) establish or acquire (A) any subsidiary other than wholly-owned subsidiaries or (B) subsidiaries organized outside of the United States and its territorial possessions;
(xvi) amend, modify or waive any term of any outstanding security of the Company or any of its subsidiaries, except as otherwise provided in this Agreement;
(xvii) fail to (A) maintain any real property to which the Company and any of its subsidiaries have ownership or a leasehold interest (including, without limitation, the furniture, fixtures, equipment and systems therein) in its current condition, subject to reasonable wear and tear and subject to any casualty or condemnation or Material Contract, (B) timely pay all taxes, water and sewage rents, assessments and insurance premiums affecting such real property and (C) timely comply in all material respects with the terms and provisions of all leases, contracts and agreements relating to such real property and the use and operation thereof;
(xviii) enter into any labor or collective bargaining agreement, memorandum or understanding, grievance settlement or any other agreement or commitment to or relating to any labor union, except as required by Law;
(xix) settle or compromise any pending or threatened suit, action, claim or litigation with any current or former officer, employee or director or in excess of $100,000 per litigation net of insurance proceeds or in excess of $250,000 in the aggregate net of insurance proceeds;
(xx) change any of the accounting policies, practices or procedures (including tax accounting policies, practices and procedures) used by the Company and its subsidiaries as of the date hereof, except as may be required as a result of a change in applicable Law or in United States generally accepted accounting principles;
(xxi) revalue in any material respect any of its assets, including, without limitation, writing down the value of inventory in any material manner or the write-off of notes or accounts receivable in any material manner, except as may be required as a result of a change in applicable Law or in United States generally accepted accounting principles;
(xxii) make or change any material tax election, make or change any method of accounting with respect to Taxes, file any amended Tax Return or settle or compromise any material tax liability;
(xxiii) to, pay, discharge or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities reflected or reserved against in the financial statements of the Company or incurred in the ordinary course of business and consistent with past practice;
(xxiv) except as provided in Section 5.09, take any action to exempt any Person (other than Parent or omit Merger Sub) or any action taken by such Person from, or make such Person or action not subject to, (A) the provisions of Section 203 of the DGCL, if applicable, or (B) any other state takeover law or state law that purports to take limit or restrict business combinations or the ability to acquire or vote shares;
(xxv) take, or agree or commit to take, any action that would, or is reasonably likely to to, make any representation or warranty of the Company contained in this Agreement inaccurate at, or as of any time prior to, the Effective Time or result in any of the conditions to the Merger set forth in Article VII 6 not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take , or permit any of its Subsidiaries omit, or agree to omit, to take any action that is reasonably likely necessary to prevent the consummation of the Mergerany such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied; or
(sxxvi) agree, authorize agree or commit to do any of the foregoing.
(c) Except as expressly contemplated or permitted by this Agreement or as agreed to in writing by the Company or as required by Law, during the period from the date of this Agreement to the earlier of the Effective Time or the termination of this Agreement in accordance with Article 7, Parent shall not, and shall not permit Merger Sub to:
(i) take, or agree or commit to take, any action that would, or is reasonably likely to, (A) make any representation or warranty of Parent and Merger Sub contained in this Agreement inaccurate at, or as of any time prior to, the Effective Time or result in any of the conditions to the Merger set forth in Article 6 not being satisfied, or (B) omit, or agree to omit, to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time or to prevent any such condition from not being satisfied; and
(ii) agree or commit to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Blair Corp)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after (a) During the period from the date hereof of this Agreement and prior to continuing until the earlier of the termination of this Agreement or the Effective Time (unless Parent shall otherwise approve in writing) and of the Merger, except as required by applicable Laws or as provided for set forth in this Agreementthe Disclosure Schedule, each of the Company and its Subsidiaries shall unless Active has consented in writing thereto, Alier:
(i) Shall conduct its business in the operations according to its usual, regular and ordinary course in substantially the same manner as heretofore conducted;
(ii) To the extent consistent with past practice and it its business, shall use commercially reasonable efforts to preserve intact its business organization and relationships with third parties and goodwill, keep available the services of its present officers officers, employees and employees. Without limiting contractors and maintain satisfactory relationships with those persons having business relationships with it;
(iii) Shall promptly notify Active of any Material Adverse Effect, any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the generality same may be contemplated), or the material breach of the foregoing, from the date of this Agreement until the Effective Time, except any representation or warranty contained herein;
(iv) Shall not (A) issue any shares of its capital stock, effect any stock split or otherwise change its capitalization as otherwise expressly permitted by this Agreement, it existed on the date hereof; (B) as Parent may approve in writing (such approval not to be unreasonably withheld grant, confer or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letteraward any option, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws warrant, conversion right or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions right not existing on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such its capital stock; (C) increase any compensation, make payment of cash bonuses to, or enter into or amend any employment agreement with any of its present or future officers, directors, employees or contractors except for normal increases consistent with past practice; (D) grant any severance or termination package to any employee, contractor or consultant; or (E) adopt any new employee benefit plan (including any stock option, stock benefit or such convertible stock purchase plan) or exchangeable securitiesamend any existing employee benefit plan in any material respect, except to the extent required by applicable law or under the terms of this Agreement;
(dv) materially and adversely modifyShall not enter into any agreement or transaction, terminate or renew agree to enter into any Material Contract agreement or transaction, outside the ordinary course of business, including, without limitation, any Contract that would be transaction involving a Material Contract if in existence on merger, consolidation, joint venture, license agreement partial or complete liquidation or dissolution, reorganization, recapitalization, restructuring or a purchase, sale, lease or other disposition of a material portion of assets or capital stock;
(vi) With the date hereof, (i) except exception of licenses entered into in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying transfer to any person or renewing the Contracts in the ordinary course of business entity any rights to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000Intellectual Property Rights;
(evii) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory Except in the ordinary course of business, sales with prior notice to Active, shall not violate, amend, or otherwise change the terms of obsolete assets and sales, leases, licenses or other dispositions any of assets with a fair market value not in excess of $250,000 the contracts set forth in the aggregate, Disclosure Schedules;
(viii) Shall not commence a lawsuit other than pursuant for: the routine collection of bills (other than against customers or vendors of Active and its Subsidiaries of which Active or its counsel have received notice); or for injunctive relief on the grounds that Alier has suffered immediate and irreparable harm not compensable in money damages provided Alier has obtained the prior written consent of Active, such consent not to Contracts in effect prior to the date be unreasonably withheld; or for breach of this Agreement;
(oix) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are Shall not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any other action which could reasonably be expected to accelerate the vesting cause a major customer or payment, supplier or fund key employee or in any other way secure the payment, of compensation or benefits under any Benefit Plan, contractor to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations terminate its relationship with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its SubsidiariesAlier;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoing.
Appears in 1 contract
Sources: Agreement and Plan of Reorganization (Active Software Inc)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after (a) During the period from the date hereof of this Agreement and prior to continuing until the earlier of the termination of this Agreement or the Effective Time (unless Parent shall otherwise approve in writing) and of the Merger, except as required by applicable Laws or as provided for set forth in this Agreementthe Disclosure Schedule, each of the Company and its Subsidiaries shall unless Active has consented in writing thereto, Premier:
(i) Shall conduct its business in the operations according to its usual, regular and ordinary course in substantially the same manner as heretofore conducted;
(ii) To the extent consistent with past practice and it its business, shall use commercially reasonable efforts to preserve intact its business organization and relationships with third parties and goodwill, keep available the services of its present officers officers, employees and employees. Without limiting contractors and maintain satisfactory relationships with those persons having business relationships with it;
(iii) Shall promptly notify Active of any Material Adverse Effect, any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the generality same may be contemplated), or the material breach of the foregoing, from the date of this Agreement until the Effective Time, except any representation or warranty contained herein;
(iv) Shall not (A) issue any shares of its capital stock, effect any stock split or otherwise change its capitalization as otherwise expressly permitted by this Agreement, it existed on the date hereof; (B) as Parent may approve in writing (such approval not to be unreasonably withheld grant, confer or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letteraward any option, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws warrant, conversion right or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions right not existing on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such its capital stock; (C) increase any compensation, make payment of cash bonuses to, or enter into or amend any employment agreement with any of its present or future officers, directors, employees or contractors except for normal increases consistent with past practice; (D) grant any severance or termination package to any employee, contractor or consultant; or (E) adopt any new employee benefit plan (including any stock option, stock benefit or such convertible stock purchase plan) or exchangeable securitiesamend any existing employee benefit plan in any material respect, except to the extent required by applicable law or under the terms of this Agreement;
(dv) materially and adversely modifyShall not enter into any agreement or transaction, terminate or renew agree to enter into any Material Contract agreement or transaction, outside the ordinary course of business, including, without limitation, any Contract that would be transaction involving a Material Contract if in existence on merger, consolidation, joint venture, license agreement partial or complete liquidation or dissolution, reorganization, recapitalization, restructuring or a purchase, sale, lease or other disposition of a material portion of assets or capital stock;
(vi) With the date hereof, (i) except exception of licenses entered into in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying transfer to any person or renewing the Contracts in the ordinary course of business entity any rights to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000Intellectual Property Rights;
(evii) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory Except in the ordinary course of business, sales with prior notice to Active, shall not violate, amend, or otherwise change the terms of obsolete assets and sales, leases, licenses or other dispositions any of assets with a fair market value not in excess of $250,000 the contracts set forth in the aggregate, Disclosure Schedules;
(viii) Shall not commence a lawsuit other than pursuant for: the routine collection of bills (other than against customers or vendors of Active and its Subsidiaries of which Active or its counsel have received notice); or for injunctive relief on the grounds that Premier has suffered immediate and irreparable harm not compensable in money damages provided Premier has obtained the prior written consent of Active, such consent not to Contracts in effect prior to the date be unreasonably withheld; or for breach of this Agreement;
(oix) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are Shall not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any other action which could reasonably be expected to accelerate the vesting cause a major customer or payment, supplier or fund key employee or in any other way secure the payment, of compensation or benefits under any Benefit Plan, contractor to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations terminate its relationship with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its SubsidiariesPremier;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. The (a) Except as set forth in Section 6.1 of the Company Disclosure Schedule, the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing) , which approval shall not be unreasonably withheld, and except as required otherwise expressly contemplated by applicable Laws this Agreement or as provided for the Stock Option Agreement):
(i) it and its Subsidiaries' businesses shall be conducted in this Agreementthe ordinary and usual course; it being understood and agreed that nothing contained herein shall permit the Company to enter into or engage in (through acquisition, each product extension or otherwise) the business of selling any products or services materially different from existing products or services of the Company and its Subsidiaries or entering into or engaging in new lines of business;
(ii) it and its Subsidiaries shall conduct use their respective reasonable best efforts to preserve their business organizations intact and maintain their existing relations and goodwill with customers, suppliers, reinsurers, agents, creditors, lessors, providers and regulators, employees and business associates;
(iii) it shall not (A) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its business Subsidiaries; (B) amend its certificate of incorporation or by-laws or amend the Rights Agreement or adopt any new rights agreement or similar agreement; (C) split, combine or reclassify its outstanding shares of capital stock; (D) authorize, declare, set aside or pay any dividend or other distribution payable in cash, stock or property in respect of any capital stock other than dividends from its direct or indirect wholly owned Subsidiaries; or (E) repurchase, redeem or otherwise acquire, except in connection with any of the Company Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its stock or any securities convertible into or exchangeable or exercisable for any shares of its stock;
(iv) neither it nor any of its Subsidiaries shall (A) issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any other property or assets (other than Shares issuable pursuant to options or pursuant to stock bonus plans outstanding on the date hereof under any of the Company Stock Plans and options on up to 100,000 Shares granted under the Company Stock Plans after the date hereof to non-executive officers and consistent with prior practice); (B) other than in the ordinary and usual course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of business, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other property or assets (including capital stock of any of its present officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective TimeSubsidiaries) or incur or modify any material indebtedness or other liability, except (A) as otherwise expressly permitted for immaterial Liens arising by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or operation of law; (C) as set forth make or authorize or commit to any capital expenditures other than in accordance with or pursuant to the summary of the calendar year 1998 capital appropriations/spending budgets in Section 6.1 6.1(a)(iv)(C) of the Company Disclosure Letter, and, during calendar year 1999, shall not make or authorize or commit to any capital expenditures in excess of the 1998 capital expenditure limit set forth in Section 6.1(a)(iv)(C) of the Company will not and will not permit its Subsidiaries to:
Disclosure Letter; or (aD) adopt make any acquisition of, or propose investment in, assets or stock of any change other Person or entity in its articles excess of incorporation or bylaws or $3 million other applicable governing instrumentsthan Passive Investments;
(bv) merge neither it nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or consolidate awards under, amend or otherwise modify, any Compensation and Benefit Plans except as required by Law or increase the salary, wage, bonus or other compensation of any employees except increases for employees who are not elected officers of the Company occurring in the ordinary and usual course of business (which shall include normal periodic performance reviews and related compensation and benefit increases), and if the Merger is not consummated on or prior to December 31, 1998 and this Agreement is not terminated in accordance with its terms, increases in compensation for elected officers of the Company occurring in the ordinary and usual course of business;
(vi) neither it nor any of its Subsidiaries shall pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations in the ordinary and usual course of business;
(vii) neither it nor any of its Subsidiaries shall make or change any material Tax election, settle any audit, file any amended Tax Returns or permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated except in the ordinary and usual course of business;
(viii) neither it nor any of its Subsidiaries shall enter into any Contract containing any provision or covenant limiting in any respect the ability of the Company or any of its Subsidiaries with or any of their "Affiliates" (as defined in Rule 12b-2 under the Exchange Act) to (A) sell any products or services of or to any other Person, (B) engage in any line of business (including geographic limitations) or restructure, reorganize (C) compete with or completely obtain products or partially liquidate or otherwise enter into services from any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumberPerson, or authorize limiting the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights ability of any kind Person to acquire any shares of such capital stock provide products or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material services to the Company or any of its Subsidiaries on or their Affiliates;
(ix) enter into any assets of the Company or new reinsurance arrangements;
(x) neither it nor any of its Subsidiaries having a value will terminate, or amend, or modify in excess any material respect, any Material Company Contract, other than provider Contracts that are terminated or amended or modified in the ordinary and usual course of $50,000business and other than renewal of customer Contracts in the ordinary and usual course of business; it being understood that the Company shall use its reasonable best efforts to keep Parent advised of any anticipated termination of or material amendment or modification of any Material Customer Contract or Material Provider Contract and to make available to Parent the Exclusivity Contracts;
(fxi) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to neither it nor any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) shall take any action or omit to take any action that is reasonably likely would cause any of its representations and warranties herein to result become untrue in any of the conditions to the Merger set forth in Article VII not being satisfied;material respect; and
(qxii) take any action that would violate the CIA;
(r) knowingly take or permit neither it nor any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, will authorize or commit enter into an agreement to do any of the foregoing.
(b) During the period from the date of this Agreement through the Effective Time, (i) as requested by Parent, the Company shall confer on a regular basis with one or more representatives of Parent with respect to material operational matters (including the general status of provider and customer contracts), (ii) upon the knowledge of the executive officers of the Company of any event or occurrence that is reasonably likely to result in a Company Material Adverse Effect, any material litigation or material governmental complaints, investigation or hearings (or communications indicating that the same may be contemplated), the breach in any material respect of any representation, warranty or covenant contained herein, or the failure of any condition precedent to the Merger, the Company shall promptly notify Parent thereof and (iii) upon the knowledge of the executive officers of Parent of any event or occurrence that is reasonably likely to result in a Parent Material Adverse Effect or the failure of any condition precedent to the Merger, Parent shall promptly notify the Company thereof.
(c) Except as disclosed in the Parent Reports filed prior to the date hereof, Parent covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless the Company shall otherwise approve in writing, which approval shall not be unreasonably withheld, and except as otherwise expressly contemplated by this Agreement) that (i) except as set forth in Section 6.1(c) of the Parent Disclosure Schedule, Parent and its Subsidiaries' businesses shall be conducted in the ordinary and usual course; and (ii) Parent shall not authorize, declare, set aside or pay any dividend or other distribution in respect of any capital stock of Parent, other than dividends from its direct or indirect wholly owned Subsidiaries and regular annual dividends of $0.03 per share of the Parent Common Stock.
Appears in 1 contract
Interim Operations. The Company (i) West shall not knowingly take or permit any of its Subsidiaries to take any action or refrain from taking any action the result of which would be reasonably expected to result in any of the closing conditions set forth in Sections 5.1 and 5.3 hereof not to be satisfied. West covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (Time, unless Parent East shall otherwise approve in writing) writing (such approval not to be unreasonably withheld or delayed), and except as otherwise expressly contemplated by this Agreement or as required by applicable Laws or as provided for in this AgreementLaws, each its business and that of the Company and its Subsidiaries shall conduct its business be conducted in the ordinary and usual course and, to the extent consistent with past practice therewith, it shall, and it shall cause its Subsidiaries to, use their respective reasonable best efforts to preserve their business organizations intact its and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business organization and relationships with third parties associates and keep available the services of the present employees and agents of West and its present officers and employeesSubsidiaries. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted required by this AgreementAgreement or applicable Laws, (B) as Parent East may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 4.1(i) of the Company West Disclosure Letter, the Company West will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles certificate of incorporation or bylaws by-laws or other applicable governing instrumentsinstruments or amend any term of the Shares;
(b) merge or consolidate the Company West or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of West that are not obligors or restructureguarantors of third-party indebtedness, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesadopt a plan of liquidation;
(c) acquire assets outside of the ordinary course of business with a value or purchase price in excess of $10,000,000 in the aggregate, other than acquisitions pursuant to Contracts to the extent in accordance with benefits outstanding effect immediately prior to the date hereof under execution of this Agreement and as otherwise set forth in Section 4.1(i)(c) of the Company West Disclosure Letter, and other than capital expenditures within West’s capital expenditure budget as set forth in Section 4.1(i)(j) of the West Disclosure Letter;
(d) other than as set forth in Section 4.1(i)(d) of the West Disclosure Letter and other than the issuance of shares or options pursuant to West Stock Plans, West Awards, West Warrants or West Convertible Debt, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company West or any its SubsidiariesSubsidiaries (other than the issuance of shares by a wholly owned Subsidiary of West to West or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(de) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if other than (A) specified encumbrances described in existence on the date hereof, (iSection 4.1(i)(e) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement West Disclosure Letter; (B) encumbrances for current Taxes or compliance by the Company with the provisions of this Agreement will conflict withother governmental charges not yet due and payable; (C) mechanics’, carriers’, workmen’s, repairmen’s or result in any violation other like encumbrances arising or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts incurred in the ordinary course of business consistent with past practice relating to obligations as to which there is no default on the extent such Contracts can be terminated after part of West, or the validity or amount of which is being contested in good faith by appropriate proceedings; and (D) other encumbrances that do not, individually or in the aggregate, materially impair the continued use, operation, value or marketability of any such entering intoWest Aircraft, modification West Slots, West Gates or renewal at a cost West Real Property or the conduct of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date business of this Agreement, West and its Subsidiaries as presently conducted; create or incur any Lien material to the Company West or any of its Subsidiaries on any assets of the Company West or any of its Subsidiaries having a value in excess of $50,00010,000,000;
(f) other than as set forth in Section 4.1(i)(f) of the West Disclosure Letter, make any loans, advances or capital contributions to or investments in any Person (other than the Company West or any direct or indirect wholly-owned Subsidiary of the CompanyWest) in excess of $50,000 10,000,000 in the aggregate;
(g) declare, set aside, make aside or pay any dividend or other distribution, payable distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) on (i) any Shares or West Preferred Shares, with respect to or (ii) any shares of its capital stock or the capital stock of its Subsidiaries any Subsidiary (except for dividends paid by any direct or indirect other than wholly-owned Subsidiary Subsidiaries and pro rata dividends payable to the Company or to any other direct or indirect holders of interests in non wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stockSubsidiaries);
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeemrepurchase, purchase redeem or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such its capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities other than as set forth in on Section 5.1(j)(i)(D4.1(i)(i) of the Company West Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company West or any of its Subsidiaries, except for (i) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 10,000,000 in the aggregate, (ii) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replacedcustomary commercial terms, (iii) guarantees incurred in compliance with this Section 6.1 by the Company West of indebtedness of wholly-owned Subsidiaries of the Company West or guarantees by Subsidiaries of indebtedness of West, or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 10,000,000 of notional debt in the aggregateaggregate in addition to notional debt currently under swap or similar arrangements;
(j) except as set forth in the capital budgets set forth in Section 6.1(j4.1(i)(j) of the Company West Disclosure Letter and consistent therewithLetter, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month periodexpenditure;
(k) other than in the ordinary course of business, enter into any Contract that would have been a West Material Contract had it been entered into prior to the date of this Agreement (other than as permitted by Section 4.1(i)(d), (e), (i) or (j));
(l) make any changes with respect to accounting policies or procedures, except as required to comply withby changes in GAAP or by applicable Law or except as West, or to comply after consultation with changes inEast and each party’s independent auditors, GAAPdetermines in good faith is preferable;
(lm) settle any litigation or other proceedings before or threatened to be brought before a Governmental Entity for an amount to be paid by West or any of its Subsidiaries in excess of $200,000 10,000,000 or which would be reasonably likely to have a material adverse impact on the operations of West or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Dateits Subsidiaries;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory other than in the ordinary course of business, sales (i) amend or modify in any material respect, or terminate or waive any material right or benefit under, any West Material Contract, or (ii) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $10,000,000;
(o) except as required by Law or by any currently effective tax sharing agreement listed in Section 4.1(i)(o) of the West Disclosure Letter, make any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement or adopt any method therefor that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods.
(p) sell, lease, license, leaseback, abandon, or otherwise dispose of any assets of West or its Subsidiaries except (i) in the ordinary course of business or obsolete assets and or (ii) sales, leases, licenses licenses, leasebacks, abandonments or other dispositions of assets with a fair market value not in excess of $250,000 10,000,000 in respect of any one asset and not in excess of $15,000,000 in the aggregate, aggregate other than (x) as set forth in
Section 4.1 (i)(p) of the West Disclosure Letter and (y) any dispositions of assets to the extent used as consideration for acquisitions that are permitted pursuant to Contracts in effect prior to the date of this AgreementSection 4.1(i)(c);
(oq) except in connection with the replacement of any existing employee, including any officer, on compensation terms that are not materially different from those of the replaced employee or officer, or except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth that have been provided to East, or except as West, based upon advice of its counsel, determines in good faith is preferable for purposes of compliance with Section 5.1(h) 409A of the Company Disclosure LetterCode, or as otherwise required by applicable Law, (i) grant or except with respect to any newly-hired employees (excluding officers), enter into any commitment to provide any severance or termination payments or benefits to (or amend any existing arrangement with) any director, officer or employee of the Company West or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, benefits payable under any existing severance or termination benefit policy or employment agreement, (iii) except with respect to any newly-hired employees (excluding officers), enter into any employment severance, change in control, termination, deferred compensation or other benefits of, pay similar agreement (or amend any bonus to, or make any new equity awards to such existing agreement) with any director, officer or employee of the Company West or any of its Subsidiaries, except(iv) establish, in adopt, amend or terminate any West Compensation and Benefit Plan, (v) increase the case compensation, bonus or other benefits of, make any new awards under any West Compensation and Benefit Plan to, or pay any bonus to any director, officer, employee, consultant or independent contractor of employees who are not officersWest or any of its Subsidiaries, except for increases, new awards or payments in the ordinary course of business consistent with past practice for employees who are not among West’s Section 16 Officers, (iiivi) establishtake any action to fund or in any other way secure the payment of compensation or benefits under any West Compensation and Benefit Plan, adopt, amend or terminate any Benefit Plan or amend except as required pursuant to the terms of any outstanding equity-based awardsthereof, (ivvii) take any action to accelerate the vesting or payment, or fund or in payment of any other way secure the payment, of compensation or benefits under any West Compensation and Benefit PlanPlans, to the extent not already provided required in any such West Compensation and Benefit Plan, (vviii) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any West Compensation and Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; , (ix) amend the terms of any outstanding equity-based award, (x) provide for accelerated vesting, removal of restrictions or exercisability of any stock based or stock related awards (including stock options, stock appreciation rights, performance units and restricted stock units) upon a change in control occurring on or prior to the Effective Time, or (vixi) forgive enter into any loans new collective bargaining agreements (or material amendments to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIAexisting collective bargaining agreements);
(r) decrease or defer in any material respect the level of training provided to the employees of West or any of its Subsidiaries or the level of costs expended in connection therewith;
(s) fail to keep in effect any governmental route authority in effect and used by any Subsidiary of West as of the date of this Agreement, provided that the restrictions set forth in this Section 4.1(i)(s) shall not apply to any such failure if such failure occurs in the ordinary course of business consistent with past practice;
(t) make any material West Route changes, other than changes in the ordinary course of business consistent with past practice;
(u) fail to maintain insurance at levels at least comparable to current levels or otherwise in a manner inconsistent with past practice;
(v) take any action, or fail to take action, which action or failure could result in the loss of West Slots with an aggregate value in excess of $10,000,000;
(w) fail to notify East in writing of any incidents or accidents occurring on or after the date hereof involving any property owned or operated by West that resulted or could reasonably be expected to result in damages or losses in excess of $10,000,000;
(x) fail to continue, in respect of all West Aircraft, all material maintenance programs consistent with past practice (except as required or permitted by applicable Law), including using reasonable best efforts to keep all such West Aircraft in such condition as may be necessary to enable to airworthiness certification of such West Aircraft under the Federal Aviation Act to be maintained in good standing at all times;
(y) agree or commit to do any of the foregoing.
(ii) East shall not knowingly take or permit any of its Subsidiaries to take any action that is or refrain from taking any action the result of which would be reasonably likely expected to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do result in any of the foregoing.closing conditions set forth in Sections 5.1 and 5.2 not to be satisfied. East covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time, unless West shall otherwise approve in writing (such approval not to be unreasonably withheld or delayed), and except as otherwise expressly contemplated by this Agreement or as required by applicable Laws, its business and that of its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries to, use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of the present employees and agents of East and its Subsidiaries. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement or applicable Laws, (B) as West may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 4.1(ii) of the East Disclosure Letter, East will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments or amend any term of the East Common Stock;
(b) merge or consolidate East or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of East that are not obligors or guarantors of third-party indebtedness, or adopt a plan of liquidation;
(c) acquire assets outside of the ordinary course of business with a value or purchase price in excess of $10,000,000 in the aggregate, other than acquisitions pursuant to Contracts to the extent in effect immediately prior to the execution of this Agreement and as otherwise set forth in Section 4.1(ii)(c) of the East Disclosure Letter, and other than capital expenditures within East’s capital expenditure budget as set forth in Section 4.1(ii)(j) of the East Disclosure Letter;
(d) other than as set forth in Section 4.1(ii)(d) of the East Disclosure Letter and other than the issuance of shares or options pursuant to stock-based benefit plans and under individual employment agreements to which East is a party, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of East or any its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of East to East or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, conversion rights, stock appreciation rights, redempti
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after (a) During the period from the date hereof of this Agreement and prior to continuing until the earlier of the termination of this Agreement or the Effective Time (Time, unless Parent has consented in writing thereto (which consent shall otherwise approve in writing) and except as required by applicable Laws not be unreasonably withheld or as provided for in this Agreementdelayed), each of the Company and its Subsidiaries shall Subsidiary shall:
(i) conduct its business in the and operations according to its usual, regular and ordinary course consistent with past practice and it shall practice;
(ii) use commercially reasonable efforts to preserve intact its business organization and relationships with third parties and goodwill, keep available the services of its present officers and employees. Without limiting the generality employees and maintain satisfactory relationships with those Persons having business relationships with it;
(iii) not amend its charter or by-laws or comparable governing instruments or any material term of the foregoingany outstanding securities of, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letterother ownership interests in, the Company will not and will not permit or its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instrumentsSubsidiary;
(biv) merge or consolidate promptly notify Parent of any material event affecting the Company or any of and/or its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance ofSubsidiary, any shares material litigation or material governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), the breach of capital stock any representation or warranty contained herein or the occurrence or non-occurrence of any event the occurrence or non-occurrence of which would be likely to cause any representation or warranty contained in this Agreement to be or become untrue or inaccurate, any failure of the Company or its Subsidiary to comply with or satisfy any its Subsidiariescovenant, condition or securities convertible agreement to be complied with or exchangeable into satisfied by it hereunder or exercisable for any shares notice or other communication from any third party alleging that the consent of such capital stock, third party is or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would may be a Material Contract if required in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of connection with the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000Agreement;
(ev) except pursuant promptly deliver to Contracts in effect prior Parent true and complete copies of any report, statement or schedule filed with the Commission subsequent to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(fvi) make not (A) except pursuant to the exercise of options existing on the date hereof and disclosed pursuant to this Agreement, issue any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any shares of its capital stock or the capital other security, effect any stock of its Subsidiaries (except for dividends paid by any direct split, or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible otherwise change its capitalization as it exists on the date hereof; (B) grant, confer or exchangeable into award any option, warrant, conversion right or exercisable for other right not existing on the date hereof to acquire any shares of its capital stock; (C) increase any compensation or fringe benefits or enter into or amend any employment agreement with any of its present or future officers, directors or employees, except for normal increases in salaries or wages of employees of the Company and/or its Subsidiary who are not directors or officers of the Company in the ordinary course of business and consistent with past practice; (D) grant any severance or termination package to any employee or consultant not currently required to be paid under existing severance plans to, or enter into any employment, consulting or severance agreement or arrangement with, any present or former director, officer or other employee of the Company and/or any Subsidiary; (E) adopt any new employee benefit plan (including any stock option, stock benefit or stock purchase plan) or amend any existing employee benefit plan in any material respect, except for changes which are less favorable to participants in such plans or to effect the conversion or cancellation of Company Options in accordance with Section 2.2 hereof or to amend such plans as required by law; or (F) establish, adopt, enter into or amend or terminate any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, agreement, trust, fund, policy or arrangement for the benefit of any present or former directors, officers or employees or the Company and/or any Subsidiary, except if required by law;
(vii) not (A) declare, set aside, make or pay any dividend or make any other distribution or payment payable in cash, stock, property or otherwise with respect to any shares of its capital stock or other ownership interests; or (B) directly or indirectly, redeem, purchase or otherwise acquire any shares of its capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plansor make any commitment for any such action;
(iviii) except under credit facilities set forth in Section 5.1(j)(i)(Dnot enter into any material agreement or transaction, or agree to enter into any material agreement or transaction, outside the ordinary course of business, including, without limitation, any transaction involving any merger, consolidation, joint venture, license agreement, partial or complete liquidation or dissolution, reorganization, recapitalization, restructuring, or a purchase, sale, lease or other acquisition or disposition of any assets or capital stock;
(ix) of the Company Disclosure Letter, not incur any indebtedness for borrowed money or assume, endorse, guarantee or otherwise become responsible for any such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security securities of the Company or others, in any of its Subsidiaries, except for indebtedness for borrowed money incurred such case other than in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregateits business;
(jx) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) not make any changes with respect to accounting policies loans, advances or procedures, except as required to comply withcapital contributions to, or to comply with changes investments in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory Person other than in the ordinary course of business, sales of obsolete assets and sales, leases, licenses ;
(xi) not make or other dispositions of assets with a fair market value not commit to make any capital expenditures or lease commitments in excess of $250,000 25,000 individually or $100,000 in the aggregate, other than pursuant to Contracts except for purchases of equipment for resale in effect prior to the date ordinary course of this Agreementbusiness;
(oxii) not voluntarily elect to alter materially the manner of keeping its books, accounts or records, or change in any manner the accounting practices or principles therein reflected except as required pursuant to existing writtenby GAAP;
(xiii) not issue, binding agreements deliver, sell, lease, sell and leaseback, pledge, dispose of or policies in effect prior encumber, or authorize or commit to the date issuance, delivery, sale, lease, sale/leaseback, pledge, disposition or Encumbrance of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, material properties or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee assets of the Company or any Subsidiary, except liens for taxes not currently due and except (A) sales of its Subsidiaries, (ii) increase the compensation, bonus assets or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, inventory in the ordinary course of business consistent with past practice and (B) sales or dispositions of obsolete or worthless assets;
(xiv) use its commercially reasonable efforts to maintain insurance on its tangible assets and its businesses in such amounts and against such risks and losses as are currently in effect;
(xv) not (A) make or change any Tax election or method of accounting with respect to Taxes, (iiiB) establish, adopt, amend file any amended Tax Return or terminate (C) settle or compromise any Benefit Plan examination or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations proceeding with respect to any Benefit Plan material Tax liability, in each case other than in the ordinary course of business;
(xvi) not pay, discharge or to change the manner in which contributions to such plans are made satisfy any material claims, liabilities or the basis on which such contributions are determinedobligations (absolute, accrued, asserted or unasserted, contingent or otherwise), except as may be required for the payment, discharge or satisfaction of liabilities or obligations in the ordinary course of business consistent with past practice, or waive, release, grant or transfer any rights of significant value;
(xvii) not settle or compromise any litigation for amounts in excess of an aggregate of $100,000 (whether or not commenced prior to the date of this Agreement), other than settlements involving amounts payable by GAAP; or the Company and/or the Subsidiary that are not in excess of (vix) forgive any loans to directors, officers or employees amounts fully recoverable from insurers of the Company and/or the Subsidiary or (y) amounts applied against self-insured retention amounts or deductibles (provided such settlements do not involve any material non-monetary obligations on the part of the Company and/or its SubsidiariesSubsidiary);
(pxviii) take not change the composition, fill any action vacancies or omit to take any action that is reasonably likely to result in any increase the size of the conditions to the Merger set forth in Article VII not being satisfiedCompany's Board of Directors;
(qxix) take not hire (a) any action that would violate employee at the CIAlevel of Director or above or with an annual base salary in excess of $50,000 or (b) more than five employees in the aggregate;
(rxx) knowingly take not enter into or permit become bound by any new contract or agreement that would constitute a Material Contract or amend, terminate, waive, release or assign any right under any existing Material Contract or enter into, amend, terminate, waive, release or assign any other contract or agreement if such amendment, termination, waiver, release or assignment would cause the Company to become liable for an amount in excess of its Subsidiaries $50,000 that it was not previously liable for or to take any action that is reasonably likely give up an existing right to prevent the consummation receive an amount in excess of the Merger$50,000; or
(sxxi) agreenot amend or modify in any material respect or terminate any existing intellectual property license, authorize execute any new intellectual property license, sell, license or commit otherwise dispose of, in whole or in part, any Company Intellectual Property Rights, and/or subject any Company Intellectual Property Rights to do any Encumbrance other than licenses in the ordinary course of the foregoingbusiness.
Appears in 1 contract
Sources: Merger Agreement (Ecometry Corp)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to Since the Effective Time (unless Parent shall otherwise approve in writing) and Time, except as required by applicable Laws or as provided for set forth in this AgreementSchedule 3.40, each of the Company and its Subsidiaries shall conduct its business the Entities have:
(a) operated only in the ordinary course of business, consistent with past practice practices, and it shall use maintained, in all material respects, their properties in accordance with past practices in a condition suitable for their current use;
(b) used commercially reasonable efforts to preserve intact its business organization and relationships with third parties and keep available generally the services of its present officers and employees. Without limiting Employees, and preserved generally the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries present relationships with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesPersons having business dealings with them;
(c) not sold, transferred, assigned, conveyed or otherwise disposed of any material Assets other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering intoconsistent with past practices;
(d) not adopted or effected a plan of complete or partial liquidation, modification dissolution, restructuring, recapitalization or renewal at a cost of less than $200,000other reorganization;
(e) except in connection with capital expenditures pursuant to Contracts Schedule 1.1(b), not created or allowed the creation of any Lien other than Permitted Encumbrances on any Asset;
(f) other than pursuant to Schedule 1.1(b), not made capital expenditures in excess of (A) $100,000 for any single project or (B) $300,000 in the aggregate for all projects;
(g) not amended or proposed to amend the Company’s or any Entity’s Organizational Documents;
(h) not split, combined or reclassified any equity securities of the Company or any Entity;
(i) not, except as required by applicable Law or by any agreement in effect prior to as of the date of this Agreement, create (A) made any policy or incur any Lien material to program that would be a Company Benefit Plan, (B) increased the compensation payable or that could become payable by the Company or any of its Subsidiaries on Entity to any assets of the Employee, or (C) entered into, established or adopted any new, amended in any material respect, or terminated any plan, agreement, policy or program that is or would be a Company or any of its Subsidiaries having a value in excess of $50,000Benefit Plan;
(fj) make any loans, advances except in connection with capital expenditures spent pursuant to Schedule 1.1(b) or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declareordinary course of business consistent with past practices, set asidenot repurchased, make prepaid or pay incurred any dividend Indebtedness or other distribution, payable in cash, stock, property or otherwise, with respect to guaranteed any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness Indebtedness of another Person, issued or issue or sell sold any debt securities or warrants options, warrants, calls or other rights to acquire any debt security securities of any Entity, guaranteed any debt securities of another Person, made a capital investment in any other Person, entered into any “keep well” or other agreement to maintain the financial condition of any other Person or entered into any arrangement having the economic effect of any of the Company or any of its Subsidiariesforegoing;
(k) not, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices or in connection with capital expenditures spent pursuant to Schedule 1.1(b), entered into or amended or modified in any material respect, or consented to the termination of (i) not to exceed $200,000 other than at its stated expiry date), any Material Contract or any other agreement that, if in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries effect as of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAPExecution Date would constitute a Material Contract;
(l) settle not initiated, settled or compromised any litigation Proceeding pending or threatened before any arbitrator, court or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amountAuthority;
(m) make, adopt or change not made any material Tax election change in any method of financial accounting principles or Tax accounting methodpractices, in each case except for any such change required by a change in GAAP or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing DateLaw;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon not entered into any transaction with Sellers or allow to lapse or expire or otherwise dispose any of any assets, product lines or businesses of their Affiliates other than the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this AgreementEntities;
(o) except as required pursuant to existing written, binding agreements not entered into any Derivative Contracts;
(p) not changed their fiscal year;
(q) not made any change in any method of Tax accounting principles or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus topractices, or make any new equity awards to Tax election;
(r) not (i) granted any directorbonuses, officer whether monetary or employee of the Company otherwise, or materially increased any wages, salary, severance, pension or other compensation or benefits in respect of its SubsidiariesEmployees, except, in the case of employees who are not officers, directors, independent contractors or consultants, other than as provided in the ordinary course of business consistent with past practice , any written agreement or required by applicable Law or (iiiii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any taken action to accelerate the vesting or payment, or fund or in payment of any other way secure the payment, of compensation or benefits under benefit for any Benefit PlanEmployee, to the extent not already provided in any such Benefit Planofficer, (v) change any actuarial director, independent contractor or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesconsultant;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agreenot acquired (by merger, authorize consolidation or commit acquisition of stock or assets or otherwise) any Person, including a corporation, partnership, limited liability company or other business organization or division thereof;
(t) not entered into any agreement to do any of the foregoing; and
(u) not experienced a Material Adverse Effect (nor any event or events that, individually or in the aggregate, with or without the lapse of time, would reasonably be expected to result in a Material Adverse Effect).
Appears in 1 contract
Sources: Purchase and Sale Agreement (American Midstream Partners, LP)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after (a) During the period from the date hereof of this Agreement and prior to continuing until the earlier of the termination of this Agreement or the Effective Time of the Merger (unless Parent shall otherwise approve in writing) and the "INTERIM PERIOD"), except as required by applicable Laws or as provided for set forth in this Agreementthe Disclosure Schedules, each of the Company and its Subsidiaries shall unless iManage has consented in advance in writing thereto, THOUGHTSTAR:
(i) Shall conduct its business in the operations according to its usual, regular and ordinary course in substantially the same manner as heretofore conducted; provided that in so conducting its operations THOUGHTSTAR shall consult with iManage (through Shams Rashid, Vice President Business Development or other person designated by iManage) no less than weekly as to such operations and shall not take action or allocate resources in a manner objected to by iManage;
(ii) To the extent consistent with past practice and it its business, shall use commercially reasonable efforts to preserve intact its business organization and relationships with third parties and goodwill, keep available the services of its present officers officers, employees and employees. Without limiting contractors and maintain satisfactory relationships with those persons having business relationships with it;
(iii) Shall promptly notify iManage of any Material Adverse Effect, any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the generality same may be contemplated), or the material breach of the foregoingany representation or warranty contained herein;
(iv) Shall not (A), from except as contemplated by Sections 2.7(b) and 2.8(b), issue any shares of its capital stock, effect any stock split or otherwise change its capitalization as it existed on the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, hereof; (B) as Parent may approve in writing (such approval not to be unreasonably withheld grant, confer or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letteraward any option, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws warrant, conversion right or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions right not existing on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such its capital stock; (C) increase any compensation, make payment of cash bonuses to, or enter into or amend any employment agreement with any of its present or future officers, directors, employees or contractors except for normal increases consistent with past practice; (D) grant any severance or termination package to any employee, contractor or consultant; or (E) adopt any new employee benefit plan (including any stock option, stock benefit or such convertible or exchangeable securitiesstock purchase plan) or, except as contemplated by Section 5.8, amend any existing employee benefit plan in any material respect;
(dv) materially and adversely modifyShall not enter into any agreement or transaction, terminate or renew agree to enter into any Material Contract agreement or transaction, including, without limitation, any Contract that would be transaction involving a Material Contract if in existence on merger, consolidation, joint venture, license agreement partial or complete liquidation or dissolution, reorganization, recapitalization, restructuring or a purchase, sale, lease or other disposition of a material portion of assets or capital stock;
(vi) With the date hereof, (i) except exception of licenses entered into in the ordinary course of business, shall not, without prior notice to iManage, transfer to any person or entity any rights to the Intellectual Property Rights;
(iivii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict withShall not violate in any material respect, amend, or result in any violation or breach of, or default (with or without notice or lapse otherwise change the terms of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as contracts set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month periodSchedules;
(kviii) make any changes with respect to accounting policies Shall not commence a lawsuit other than for: (A) the routine collection of bills (other than against customers or proceduresvendors of iManage and its Subsidiaries of which iManage or its counsel have received notice); (B) injunctive relief on the grounds that THOUGHTSTAR has suffered immediate and irreparable harm not compensable in money damages provided THOUGHTSTAR has obtained the prior written consent of iManage, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required consent not to be filed, and pay all Taxes required to be paid, on unreasonably withheld; or before the Closing Date;
(nC) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date breach of this Agreement;
(oix) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are Shall not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any other action which could reasonably be expected to accelerate the vesting cause a major customer or payment, supplier or fund key employee or in any other way secure the payment, of compensation or benefits under any Benefit Plan, contractor to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations terminate its relationship with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its SubsidiariesTHOUGHTSTAR;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. The Company covenants From and agrees as to itself and its Subsidiaries that, after the date hereof hereof, the Sellers shall cause the Companies and prior their Subsidiaries to the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, each of the Company and its Subsidiaries shall conduct its business their respective businesses in the ordinary course consistent with past practice and it shall use their commercially reasonable efforts to preserve intact its business organization the operations, assets, properties, physical facilities and relationships with employees, suppliers, customers and third parties having material business dealings with the Companies and keep available the services of its present officers and employeestheir Subsidiaries. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (Aa) as otherwise expressly permitted required by this Agreement, (Bb) for actions approved by the Purchasers (which approval shall not be unreasonably withheld, conditioned or delayed), (c) as Parent may approve required to comply with applicable Law, (d) for the Restructuring Transactions if and only to the extent substantially as described in writing (such approval not to be unreasonably withheld or delayed) Section 1.3 of the Disclosure Schedule or (Ce) as set forth in on Section 6.1 5.1 of the Company Disclosure LetterSchedule, from and after the date hereof, the Company will Sellers shall cause the Companies and their Subsidiaries not and will not permit its Subsidiaries toto take any of the following actions:
(ai) adopt or propose any change in amend its articles certification of incorporation or incorporation, bylaws or other applicable similar organizational or governing instrumentsdocuments;
(bii) merge adopt a plan or consolidate the Company agreement of complete or any of its Subsidiaries with any partial liquidation, dissolution, restructuring, merger, consolidation, restructuring, recapitalization or other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesreorganization;
(ciii) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, (A) issue, sell, transfer, pledge, dispose ofpurchase, redeem, retire, grant, transferdispose of or encumber the Equity Interests or any other equity or similar interests of the Companies or any of their Subsidiaries or (B) grant any option, warrant, call or other right to purchase or obtain, or otherwise dispose of or encumber, the Equity Interests or authorize any other equity or similar interests of the issuanceCompanies or any of their Subsidiaries;
(iv) enter into or consummate any transaction involving the acquisition, salemerger or consolidation of the business, pledgestock, dispositionassets or other properties of any other Person;
(v) acquire any material properties or assets or sell, grant, transferassign, lease, license, guarantee transfer, convey, exchange or encumbrance ofswap, any shares of capital stock of the Company mortgage or any its Subsidiariesotherwise encumber, or securities convertible subject to any Encumbrance (other than Permitted Encumbrance) or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights otherwise dispose of any kind to acquire any shares material portion of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the its properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having with a value or purchase price in excess of $50,000;
(f) make any loans, advances 25,000 individually or capital contributions to or investments $250,000 in any Person (the aggregate other than the Company or any direct or indirect wholly-owned Subsidiary of the Company(A) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregatepractice, (iiB) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts existing agreements in effect prior to the date hereof, (C) as may be required by applicable Law or any Governmental Authority in order to permit or facilitate the consummation of the transactions contemplated by this Agreement, or (D) dispositions of obsolete or worthless assets or (E) transactions entirely among the Companies and/or any of their wholly-owned Subsidiaries;
(vi) incur, assume, guarantee, prepay or otherwise become liable for any Indebtedness, other than (A) any Indebtedness entirely among the Companies and/or any of their wholly-owned Subsidiaries, (B) guarantees by the Companies of Indebtedness of their Subsidiaries, and (C) Indebtedness incurred pursuant to agreements in effect prior to the execution of this Agreement;
(ovii) except as required pursuant enter into, renew, amend or modify in any material respect or terminate any Material Contract, other than in the ordinary course of business consistent with past practice;
(viii) incur or commit to existing written, binding agreements any material capital expenditures other than capital expenditures incurred or policies committed in effect prior to the date ordinary course of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letterbusiness consistent with past practice, or as otherwise required by applicable Law, enter into any new line of business;
(iix) grant change its financial accounting policies or provide any severance or termination payments or benefits to any director, officer or employee of the Company procedures or any of its Subsidiariesmethods of reporting income, (ii) increase the compensation, bonus or pension, welfare, severance deductions or other benefits ofmaterial items for financial accounting purposes, pay any bonus toexcept as required by GAAP or applicable Law;
(x) reclassify, combine, split, subdivide or make any new equity awards to any director, officer or employee amend the terms of the Company or any of its Subsidiaries, exceptcapital stock or issue or authorize the issuance of any other securities in respect of, in the lieu of, or in substitution for, shares of its capital stock;
(xi) in each case of employees who are not officers, except in the ordinary course of business consistent with past practice or as set forth on Section 5.1(xi) of the Disclosure Schedule, (iiiA) establishincrease the annual level of compensation of any employee, adoptmanager, director or officer of the Companies or any of their respective Subsidiaries, (B) grant any bonus, benefit or other direct or indirect compensation to any employee, manager, director or officer of the Companies or any of their respective Subsidiaries, (C) increase the coverage or benefits available under any (or create any new) severance pay, termination pay, vacation pay, company awards, salary continuation for disability, sick leave, deferred compensation, bonus or other incentive compensation, insurance, pension or other employee benefit plan or arrangement or Company Plan made to, for, or with any employee, manager, director or officer of the Companies or any of their respective Subsidiaries or otherwise modify or amend or terminate any Benefit Plan such plan or arrangement, (D) enter into any employment, deferred compensation, severance, consulting, non-competition or similar agreement (or amend any such agreement) which provides for total annual compensation in excess of $150,000 or total annual compensation less than $150,000 to which the Companies or any of their respective Subsidiaries is a party or involving an employee, manager, director or officer of the Companies or any of their respective Subsidiaries or (F) amend, modify or terminate any Company Plan;
(xii) terminate any Key Employee, other than for “cause”;
(xiii) recognize or bargain with any Union, enter into, modify or terminate any labor or Collective Bargaining Agreement, through negotiations or otherwise, or make any commitment or incur any liability to any Union;
(xiv) cancel or terminate any of the material insurance policies of Companies or any of their respective Subsidiaries or permit any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies providing coverage equal to or greater than the coverage under such canceled, terminated or lapsed insurance policies are in full force and effect;
(xv) license, transfer, assign, abandon or otherwise dispose of the ownership of or any valid rights to use any Intellectual Property, other than non-exclusive licenses granted in the ordinary course of business consistent with past practice or any such ownership interest or right not material to the Business;
(xvi) waive any right of substantial value or voluntarily and knowingly suffer any extraordinary loss under any Material Contract;
(xvii) settle any material Action with respect to the Companies, their Subsidiaries, the Sellers or the Business (other than any litigation in connection with the collection of accounts receivable in the ordinary course of business consistent with past practice or to enforce the terms of this Agreement) that, with respect any outstanding equity-based awardssuch settlement, requires payment in excess of $50,000 or results in any limitation of the conduct of the Business as a condition to such settlement;
(xviii) (A) make, change or revoke any election relating to Taxes, (ivB) take settle and/or compromise any action to accelerate the vesting or payment, or fund or Tax liability; (C) prepare any Tax Returns in any other way secure the payment, of compensation or benefits under any Benefit Plan, a manner which is inconsistent with past practices with respect to the extent not already provided in any treatment of items on such Benefit PlanTax Returns; (D) file an amended Tax Return or a claim for refund of Taxes with respect to the income, operations or property of the Companies or the Companies’ Subsidiaries; (vE) change any actuarial annual accounting period for applicable Tax purposes, adopt or other assumptions used to calculate funding obligations with change any Tax accounting method in any material respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (viF) forgive enter into any loans closing agreement relating to directorsTaxes, officers settle, concede, compromise or employees abandon any Tax claim or assessment, surrender any right to claim a refund of the Company or any of its SubsidiariesTaxes;
(pxix) take any action or omit to take any action that is reasonably likely to result change in any material respect any timing, policy, or practices for the treatment of inventory or the conditions to the Merger set forth in Article VII not being satisfiedcollection of accounts receivable or payables of accounts payable;
(qxx) implement any layoffs or mass terminations that would give rise to any obligations or Liabilities under the Worker Adjustment and Retraining Notification Act (“WARN”) or any similar state, local, or foreign Law;
(xxi) at any time prior to the Adjustment Determination Effective Time distribute or transfer Cash and Cash Equivalents to Sellers as members with a value in excess of $100,000 in the aggregate;
(xxii) take any action that would violate reasonably be expected to, individually or together with any other action, materially and adversely affect the CIA;validity or full force and effectiveness of any Material Permit (or other material Permit necessary for the Companies and their Subsidiaries to own, lease and operate their respective properties and assets and to carry on the Business as then being conducted) or result in the expiration, non-renewal, suspension, cancellation, or revocation of any Material Permit; or
(rxxiii) knowingly take agree or permit any of its Subsidiaries commit to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any anything prohibited by this Section 5.1. Except as set forth in this Section 5.1, prior to the Closing, each Seller will exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations with respect to the foregoingBusiness.
Appears in 1 contract
Sources: Equity Purchase Agreement (Primus Telecommunications Group Inc)
Interim Operations. The Company covenants and agrees Except as to itself and its Subsidiaries thatexpressly required by this Agreement, after the Thermalloy Agreement or with the prior consent of Purchaser, from the date hereof and prior to until the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this AgreementTime, each of the Company and its the Subsidiaries shall conduct its their business in all material respects in the ordinary course consistent with past practice and it shall use their reasonable best efforts to preserve substantially intact its their business organization organizations and relationships with third parties that are material to the Company and the Subsidiaries taken as a whole and to keep available the services of its their present officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement hereof until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, Time the Company will not not, and will not permit cause its Subsidiaries not to:
(a) adopt or propose any change in its articles Certificate of incorporation Incorporation or bylaws or other applicable governing instrumentsBylaws;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any except pursuant to existing agreements or arrangements imposing material changes or restrictions (which arrangements shall be deemed to include the Thermalloy Agreement on its assetsthe terms that have heretofore been disclosed to Purchaser, operations or businesses;including the financing thereof):
(ci) acquire (by merger, consolidation or acquisition of stock or assets) any material corporation, partnership or other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plansbusiness organization or division thereof, issue, or sell, pledge, lease or otherwise dispose of, grant, transfer, encumber, of a material Subsidiary or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee a material amount of assets or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result make any investment other than in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result readily marketable securities in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value an amount in excess of $50,000;
(f) make any loans50,000 in the aggregate whether by purchase of stock or securities, advances or capital contributions to or investments in any Person (other than the Company capital or any direct property transfer, or indirect wholly-owned Subsidiary of the Company) purchase for an amount in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any assets of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct individual or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) entity other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any purchases of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred raw materials and finished goods components in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, practice;
(iii) guarantees incurred in compliance with this Section 6.1 by waive, release, grant, or transfer any rights of value material to the Company of indebtedness of wholly-owned and the Subsidiaries of the Company or taken as a whole;
(iv) interest rate swaps on customary commercial terms consistent with past practice modify or change in any material respect any existing license, lease, contract, or other document material to the Company and not to exceed $250,000 of notional debt in the aggregateits Subsidiaries, taken as a whole;
(jv) except as set forth in the to refund or refinance commercial paper and for borrowings and repayments under its revolving credit facilities for working capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewithpurposes, make incur or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for assume an amount in excess of $200,000 long-term or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not short-term debt in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(ovi) assume, guarantee, endorse (other than endorsements of negotiable instruments in the ordinary course of business) or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than any Subsidiary) which are in excess of $25,000 in the aggregate;
(vii) make any loans or advances to any other Person (other than any Subsidiary) which are in excess of $100,000 in the aggregate;
(viii) except as required pursuant for the items contemplated by the Company's 1999 capital expenditure budget made available to existing writtenPurchaser, binding agreements authorize any new capital expenditures which, individually, is in excess of $100,000 or, in the aggregate, are in excess of $250,000; or
(ix) issue, sell, pledge or policies in effect prior dispose of, or agree to issue, sell, pledge or dispose of, any additional shares of, or any options, warrants, conversion privileges or rights of any kind to acquire any shares of, the Company's capital stock (other than the issuance of shares of Common Stock upon the exercise of Options and Company Warrants outstanding on the date of this Agreement and in accordance with their present terms).
(c) split, combine or reclassify any shares of its capital stock, declare, set forth aside or pay any dividend or other distribution (whether in Section 5.1(hcash, stock or property or any combination thereof) in respect of its capital stock, other than cash dividends and distributions by a wholly owned Subsidiary of the Company Disclosure Letterto the Company or to a Subsidiary all of the capital stock of which is owned directly or indirectly by the Company, or redeem, repurchase or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its securities or any securities of its Subsidiaries;
(d) adopt or, except as otherwise required by applicable Lawlaw, amend any bonus, profit sharing, compensation, severance, termination, stock option, pension, retirement, deferred compensation, employment or employee benefit plan, agreement, trust, plan, fund or other arrangement for the benefit and welfare of any director, officer or employee, or (iexcept as required by law or for normal increases in the ordinary course of business that are consistent with past practices) grant increase in any manner the compensation or provide any severance or termination payments or fringe benefits to of any director, officer or employee or pay any benefit not required by any existing plan or arrangement (including, without limitation, the granting of stock options or stock appreciation rights or the removal of existing restrictions in any benefit plans or agreements);
(e) revalue in any material respect any of its assets, including, without limitation, writing down the value of inventory in any material manner or write-off of notes or accounts receivable in any material manner;
(f) pay, discharge or satisfy any material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise) other than the payment, discharge or satisfaction in the ordinary course of business, consistent with past practices, of liabilities reflected or reserved against in the consolidated financial statements of the Company or any incurred since the most recent date thereof pursuant to an agreement or transaction described in this Agreement (including the schedules to this Agreement) or incurred in the ordinary course of its Subsidiariesbusiness, consistent with past practices;
(iig) increase the compensationexcept as set forth on Schedule 8.2(g), bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to tax election or settle or compromise any director, officer or employee of the Company or material income tax liability;
(h) take any of its Subsidiaries, except, in the case of employees who are not officers, action other than in the ordinary course of business and consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations practices with respect to accounting policies or procedures other than any Benefit Plan or change in accounting policies (that is not material to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except Company and its Subsidiaries taken as may be a whole) that is required by GAAP; or (vi) forgive any loans to directors, officers or employees regulations of the Company SEC or any of its Subsidiariesa change in generally accepted accounting principles;
(pi) take any action or omit agree or commit to take any action that is reasonably likely to result would make any representation and warranty of the Company hereunder inaccurate in any respect at, or as of any time prior to, the conditions Effective Time (or, in the case of representations and warranties 37 that are not qualified by reference to the Merger set forth term "Material Adverse Effect" and/or taken as a whole, or derivatives or variations of such terms, inaccurate in Article VII not being satisfiedany material respect at, or as of any time prior to, the Effective Time);
(qj) take amend, waive or otherwise alter any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation provision of the MergerThermalloy Agreement; or
(sk) agree, authorize agree or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after Between the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, each of Closing Date the Company and its Subsidiaries shall Acquiree will conduct their operations as follows:
6.1 Except as herein provided, Acquiree will carry on its business in substantially the same manner as heretofore and the assets, properties and rights now owned by it will be maintained, as far as practicable, in the usual and ordinary course consistent with past practice of business, to the same extent, under the same insurance coverage and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available in the services of its present officers and employees. Without limiting the generality of the foregoing, from same condition as on the date of this Agreement until Agreement; except with the Effective Timeconsent of the Company, except (A) Acquiree shall engage in no activity or business other than as otherwise expressly permitted is presently conducted by Acquiree, or as may be necessary to effect the transactions contemplated by this Agreement;
6.2 Except as herein provided, (B) or as Parent may approve hereafter be agreed to in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of by the parties, neither the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt nor Acquiree shall sell or propose dispose of any change in its articles of incorporation property or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations nor will they encumber any property or businesses;
(c) assets, other than in accordance with benefits outstanding prior to the date hereof under normal course of their business operations or as specifically contemplated by this Agreement;
6.3 Neither the Company Stock Plansnor Acquiree will, issueexcept with the written consent of the other party, issue or sell, pledge, dispose of, grant, transfer, encumber, or authorize issue the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance ofright to subscribe to, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire for a consideration any shares of such capital stock or such convertible warrants, or exchangeable securitiesdeclare or pay any dividend on any capital stock, other than as may be specifically disclosed in any Schedule annexed hereto;
(d) materially 6.4 Except as contemplated herein, neither the Company nor Acquiree will, absent a written consent of the other, amend their Certificates of Incorporation or By-Laws;
6.5 The Company and adversely modifyAcquiree shall, terminate at reasonable times, permit access to their respective properties and their respective books and records for the purpose of examination by any party and their respective officers, directors, attorneys, accountants and representatives, and each party shall furnish to the other, upon request, any information reasonably required in respect of such property, assets and business;
6.6 Neither the Company nor Acquiree will incur any indebtedness or renew contingent liability, or enter into any Material Contract contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) agreement except in the ordinary course of business, their business or (ii) if consummation of the transactions contemplated by this Agreement in connection with any transaction specifically disclosed herein or compliance by in any Schedule hereto;
6.7 Neither the Company with the provisions of this Agreement nor Acquiree will conflict with, or result in acquire any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties business or assets of any Company going business, nor will they merge or Parent consolidate with or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to into any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to corporation, nor will they change the voting character of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedurestheir respective businesses, except as required to comply with, shall be specifically disclosed herein or to comply with changes in, GAAPin any Schedule annexed hereto;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of 6.8 Acquiree will promptly advise the Company in excess writing of such amount;
(m) make, adopt or change any material Tax election adverse change in its financial condition, business or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory affairs arising from matters occurring not in the ordinary usual course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of ; the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, will promptly advise Acquiree in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms writing of any outstanding equity-based awardsadverse change in its financial condition, (iv) take any action to accelerate the vesting business or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoingaffairs.
Appears in 1 contract
Interim Operations. The (a) Except as set forth in Section 6.1 of the Company Disclosure Letter, the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing) , such approval not to be unreasonably withheld or delayed, and except as otherwise expressly contemplated by this Agreement and except as required by applicable Laws or as provided for in this AgreementLaws), each of the Company and its Subsidiaries Company’s business shall conduct its business be conducted in the ordinary and usual course consistent with past practice and it and, to the extent consistent therewith, the Company shall use its reasonable best efforts to preserve intact its business organization organizations intact and relationships maintain existing relations and goodwill with third parties Governmental Entities, customers, suppliers, distributors, creditors, lessors, Employees, sales representatives and business associates and keep available the services of its the Company’s present officers Employees and employeesagents. Without limiting the generality of the foregoing, and in furtherance thereof, from the date of this Agreement hereof until the Effective Time, except (A) as otherwise expressly permitted required by this AgreementAgreement or applicable Law, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries toshall not:
(ai) adopt or propose any change in its articles certificate of incorporation or bylaws or other applicable governing instruments;
(bii) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(ciii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $250,000 in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in accordance with benefits outstanding prior to effect as of the date hereof under the Company Stock Plans, of this Agreement;
(iv) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guarantee, or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries(other than the issuance of shares in respect of the exercise of Company Options outstanding as of the date of this Agreement in accordance with their terms and, as applicable, the Stock Plan as in effect as of the date of this Agreement), or securities convertible or exchangeable into or into, exercisable for or with a value measured by reference to any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(dv) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000250,000;
(fvi) make any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than in the Company or any direct or indirect wholly-owned Subsidiary ordinary course of the Companybusiness) in excess of $50,000 100,000 in the aggregate;
(gvii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its SubsidiariesCompany, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries that will constitute Funded Debt as of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregateClosing;
(jviii) except as set forth in the capital budgets set forth in Section 6.1(j6.1(a)(viii) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 250,000 in the aggregate during any 12 month twelve (12)-month period;
(kix) enter into any Contract that would have been a Material Contract had it been entered into prior to this Agreement;
(x) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with by changes in, GAAPin applicable generally accepted accounting principles;
(lxi) settle any litigation actions, suits, claims, hearings, arbitrations, investigations or other proceedings before a Governmental Entity for an amount in excess of $200,000 100,000 or any obligation or liability of the Company in excess of such amount;
(mxii) other than in the ordinary course of business consistent with past practice, (a) amend, modify or terminate any Material Contract or (b) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $100,000;
(xiii) (A) make, change, or rescind any Tax election, (B) file any amended Tax Return, (C) adopt or change any material method or period of Tax election accounting, (D) settle or Tax accounting methodcompromise any claim, audit, assessment or fail dispute relating to timely Taxes; (taking E) surrender any claim for a refund of Taxes; (F) enter into account all applicable extensionsany closing agreement relating to Taxes; (G) file all any Tax Return that is inconsistent with past practice unless as otherwise required by applicable Law; (H) consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns required obtained in the ordinary course of business); or (I) take any other action related to be filedTaxes which is reasonably likely to result in a material increase in the Tax liability of the Company, and pay all Taxes required to be paidor, on in respect of any taxable period (or before portion thereof) ending after the Closing Date, the Tax liability of the Parent or the Surviving Corporation;
(nxiv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines lines, businesses or businesses interests therein of the Company or its Subsidiaries, including capital stock of any of its SubsidiariesCompany, except for sales or rental of inventory in connection with services provided in the ordinary course of business, business and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date hereof; provided, that with respect to Intellectual Property, the foregoing shall be limited to granting non-exclusive licenses in the ordinary course of this Agreementbusiness consistent with past practice with a fair market value under the foregoing threshold;
(oxv) assign or grant an exclusive license of any material right in any Intellectual Property of the Company necessary or useful for the manufacture, use, sale, offer for sale or export of any Medical Device or that otherwise enables a third party to compete with the Company with respect to the manufacture or sale of any product that competes with any Medical Device;
(xvi) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and hereof, as set forth in Section 5.1(h5.1(j)(i) of the Company Disclosure Letter, or as otherwise required by applicable Law, (iA) grant or provide any severance or termination payments or benefits to any director, officer officer, employees or employee consultants of the Company or any of its SubsidiariesCompany, (iiB) increase in any manner the compensationcompensation or consulting fees, bonus or bonus, pension, welfare, severance fringe, severance, termination pay or other benefits of, pay any bonus to, any current or make former director, officer, employee or consultant (who is a natural person) of the Company, (C) grant any new equity awards to awards, or amend or modify the terms of any directoroutstanding awards, officer or employee of the Company or under any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice Benefit Plan, (iiiD) become a party to, establish, adopt, commence participation in, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awardsarrangement that would have been a Benefit Plan had it been entered into prior to this Agreement, (ivE) take any action to accelerate the vesting vesting, lapsing of restrictions or paymentpayment in respect of any award or benefit provided pursuant to any Benefit Plan, or (F) fund or in any other way secure the payment, payment of compensation or benefits under any Benefit Plan, to the extent not already provided in (G) hire any such Benefit Planemployee or engage any consultant (who is a natural person), (vH) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or , (viI) forgive any loans or issue any loans to any current or former directors, officers officers, employees or employees consultants (who are natural persons) of the Company Company, or (J) terminate the employment of any of its Subsidiariesemployee other than for cause;
(pxvii) become a party to, establish, adopt, amend or commence participation in any collective bargaining agreement or other agreement with a labor union, works council or similar organization;
(xviii) take any action or omit to take any action that is would reasonably likely be expected to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(qxix) engage in (A) any trade loading practices or any other promotional sales or discount activity or other practice with the intent and effect of accelerating to pre-Closing periods sales to the trade or otherwise that would otherwise be expected (in the ordinary course of business) to occur in post-Closing periods, (B) any practice with the intent and effect of accelerating collections to pre-Closing periods receivables that would otherwise be expected (in the ordinary course of business) to be in post-Closing periods, (C) any practice with the intent and effect of postponing to post-Closing payments by the Company that would otherwise be expected (in the ordinary course of business) to be made in pre-Closing periods, or (D) any promotional sales, discount activity, deferred revenue activity or inventory overstocking or understocking activity, in each case in this clause (D) in a manner outside the ordinary course of business;
(xx) sell, transfer or otherwise move any Inventory from the Company other than in the ordinary course of business or hold, or take any action that would violate to facilitate or permit its distributors to hold, more than ninety (90) days of Inventory at any time at or prior to the CIAClosing other than in the ordinary course of business;
(rxxi) form a Subsidiary; or
(xxii) agree, authorize or commit to do any of the foregoing.
(b) Prior to making any written or oral communications to the officers, employees or consultants of the Company pertaining to compensation or benefit matters that are affected by the Transactions, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) The Company shall (i) consult with Parent in connection with any proposed meeting with the FDA or any other Governmental Entity relating to any Medical Device, (ii) promptly inform Parent of, and provide Parent with a reasonable opportunity to review, any material filing proposed to be made by or on behalf of the Company, and any material correspondence or other material communication proposed to be submitted or otherwise transmitted to the FDA or any other Governmental Entity by or on behalf of the Company, (iii) keep Parent promptly informed of (A) any material communication (written or oral) with or from the FDA or any other Governmental Entity and (B) any material communications (written or oral) received from any Person relating to the Intellectual Property of the Company, (iv) promptly inform Parent and provide Parent or Merger Sub with a reasonable opportunity (but no more than three (3) business days) to comment, in each case, prior to making any material change to any study protocol, adding any new trial, making any material change to a manufacturing plan or process, making any material change to a development timeline or initiating, or making any material change to, promotional or marketing materials or activities relating to any Medical Device, and (v) cooperate with, and provide reasonable access to, Parent’s representative for purposes of reviewing and assessing the Company’s compliance with any and all relevant Laws, compliance programs, and procedures, and give due consideration to any resulting recommendations provided by Parent’s representative.
(d) The Company shall use reasonable best efforts through the Closing Date to obtain any and all agreements, in duly executed form, necessary to effect the assignment to the Company of any Intellectual Property rights arising from services performed for the Company by all Employees of, and all consultants and independent contractors to, the Company who have contributed in any material respect to the creation or development of any Intellectual Property owned by the Company.
(e) Notwithstanding the foregoing, nothing contained in this Agreement shall give Parent or Merger Sub, directly or indirectly, the right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations, finances and employees.
(f) Parent shall not knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement (Conmed Corp)
Interim Operations. The Company (i) West shall not knowingly take or permit any of its Subsidiaries to take any action or refrain from taking any action the result of which would be reasonably expected to result in any of the closing conditions set forth in Sections 5.1 and 5.3 hereof not to be satisfied. West covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (Time, unless Parent East shall otherwise approve in writing) writing (such approval not to be unreasonably withheld or delayed), and except as otherwise expressly contemplated by this Agreement or as required by applicable Laws or as provided for in this AgreementLaws, each its business and that of the Company and its Subsidiaries shall conduct its business be conducted in the ordinary and usual course and, to the extent consistent with past practice therewith, it shall, and it shall cause its Subsidiaries to, use their respective reasonable best efforts to preserve their business organizations intact its and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business organization and relationships with third parties associates and keep available the services of the present employees and agents of West and its present officers and employeesSubsidiaries. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted required by this AgreementAgreement or applicable Laws, (B) as Parent East may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 4.1(i) of the Company West Disclosure Letter, the Company West will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles certificate of incorporation or bylaws by-laws or other applicable governing instrumentsinstruments or amend any term of the Shares;
(b) merge or consolidate the Company West or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of West that are not obligors or restructureguarantors of third-party indebtedness, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesadopt a plan of liquidation;
(c) acquire assets outside of the ordinary course of business with a value or purchase price in excess of $10,000,000 in the aggregate, other than acquisitions pursuant to Contracts to the extent in accordance with benefits outstanding effect immediately prior to the date hereof under execution of this Agreement and as otherwise set forth in Section 4.1(i)(c) of the Company West Disclosure Letter, and other than capital expenditures within West's capital expenditure budget as set forth in Section 4.1(i)(j) of the West Disclosure Letter;
(d) other than as set forth in Section 4.1(i)(d) of the West Disclosure Letter and other than the issuance of shares or options pursuant to West Stock Plans, West Awards, West Warrants or West Convertible Debt, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company West or any its SubsidiariesSubsidiaries (other than the issuance of shares by a wholly owned Subsidiary of West to West or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants warrants, conversion rights, stock appreciation rights, redemption rights, repurchase rights, agreements, arrangements, calls, commitments or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(de) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if other than (A) specified encumbrances described in existence on the date hereof, (iSection 4.1(i)(e) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement West Disclosure Letter; (B) encumbrances for current Taxes or compliance by the Company with the provisions of this Agreement will conflict withother governmental charges not yet due and payable; (C) mechanics', carriers', workmen's, repairmen's or result in any violation other like encumbrances arising or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts incurred in the ordinary course of business consistent with past practice relating to obligations as to which there is no default on the extent such Contracts can be terminated after part of West, or the validity or amount of which is being contested in good faith by appropriate proceedings; and (D) other encumbrances that do not, individually or in the aggregate, materially impair the continued use, operation, value or marketability of any such entering intoWest Aircraft, modification West Slots, West Gates or renewal at a cost West Real Property or the conduct of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date business of this Agreement, West and its Subsidiaries as presently conducted; create or incur any Lien material to the Company West or any of its Subsidiaries on any assets of the Company West or any of its Subsidiaries having a value in excess of $50,00010,000,000;
(f) other than as set forth in Section 4.1(i)(f) of the West Disclosure Letter, make any loans, advances or capital contributions to or investments in any Person (other than the Company West or any direct or indirect wholly-owned Subsidiary of the CompanyWest) in excess of $50,000 10,000,000 in the aggregate;
(g) declare, set aside, make aside or pay any dividend or other distribution, payable distribution (whether in cash, stock, stock or property or otherwiseany combination thereof) on (i) any Shares or West Preferred Shares, with respect to or (ii) any shares of its capital stock or the capital stock of its Subsidiaries any Subsidiary (except for dividends paid by any direct or indirect other than wholly-owned Subsidiary Subsidiaries and pro rata dividends payable to the Company or to any other direct or indirect holders of interests in non wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stockSubsidiaries);
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeemrepurchase, purchase redeem or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such its capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities other than as set forth in on Section 5.1(j)(i)(D4.1(i)(i) of the Company West Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company West or any of its Subsidiaries, except for (i) indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 10,000,000 in the aggregate, (ii) indebtedness for borrowed money in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replacedcustomary commercial terms, (iii) guarantees incurred in compliance with this Section 6.1 by the Company West of indebtedness of wholly-owned Subsidiaries of the Company West or guarantees by Subsidiaries of indebtedness of West, or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 10,000,000 of notional debt in the aggregateaggregate in addition to notional debt currently under swap or similar arrangements;
(j) except as set forth in the capital budgets set forth in Section 6.1(j4.1(i)(j) of the Company West Disclosure Letter and consistent therewithLetter, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month periodexpenditure;
(k) other than in the ordinary course of business, enter into any Contract that would have been a West Material Contract had it been entered into prior to the date of this Agreement (other than as permitted by Section 4.1(i)(d), (e), (i) or (j));
(l) make any changes with respect to accounting policies or procedures, except as required to comply withby changes in GAAP or by applicable Law or except as West, or to comply after consultation with changes inEast and each party's independent auditors, GAAPdetermines in good faith is preferable;
(lm) settle any litigation or other proceedings before or threatened to be brought before a Governmental Entity for an amount to be paid by West or any of its Subsidiaries in excess of $200,000 10,000,000 or which would be reasonably likely to have a material adverse impact on the operations of West or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Dateits Subsidiaries;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory other than in the ordinary course of business, sales (i) amend or modify in any material respect, or terminate or waive any material right or benefit under, any West Material Contract, or (ii) cancel, modify or waive any debts or claims held by it or waive any rights having in each case a value in excess of $10,000,000;
(o) except as required by Law or by any currently effective tax sharing agreement listed in Section 4.1(i)(o) of the West Disclosure Letter, make any material Tax election or take any material position on any material Tax Return filed on or after the date of this Agreement or adopt any method therefor that is inconsistent with elections made, positions taken or methods used in preparing or filing similar Tax Returns in prior periods.
(p) sell, lease, license, leaseback, abandon, or otherwise dispose of any assets of West or its Subsidiaries except (i) in the ordinary course of business or obsolete assets and or (ii) sales, leases, licenses licenses, leasebacks, abandonments or other dispositions of assets with a fair market value not in excess of $250,000 10,000,000 in respect of any one asset and not in excess of $15,000,000 in the aggregate, aggregate other than (x) as set forth in Section 4.1(i)(p) of the West Disclosure Letter and (y) any dispositions of assets to the extent used as consideration for acquisitions that are permitted pursuant to Contracts in effect prior to the date of this AgreementSection 4.1(i)(c);
(oq) except in connection with the replacement of any existing employee, including any officer, on compensation terms that are not materially different from those of the replaced employee or officer, or except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth that have been provided to East, or except as West, based upon advice of its counsel, determines in good faith is preferable for purposes of compliance with Section 5.1(h) 409A of the Company Disclosure LetterCode, or as otherwise required by applicable Law, (i) grant or except with respect to any newly-hired employees (excluding officers), enter into any commitment to provide any severance or termination payments or benefits to (or amend any existing arrangement with) any director, officer or employee of the Company West or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, benefits payable under any existing severance or termination benefit policy or employment agreement, (iii) except with respect to any newly-hired employees (excluding officers), enter into any employment severance, change in control, termination, deferred compensation or other benefits of, pay similar agreement (or amend any bonus to, or make any new equity awards to such existing agreement) with any director, officer or employee of the Company West or any of its Subsidiaries, except(iv) establish, in adopt, amend or terminate any West Compensation and Benefit Plan, (v) increase the case compensation, bonus or other benefits of, make any new awards under any West Compensation and Benefit Plan to, or pay any bonus to any director, officer, employee, consultant or independent contractor of employees who are not officersWest or any of its Subsidiaries, except for increases, new awards or payments in the ordinary course of business consistent with past practice for employees who are not among West's Section 16 Officers, (iiivi) establishtake any action to fund or in any other way secure the payment of compensation or benefits under any West Compensation and Benefit Plan, adopt, amend or terminate any Benefit Plan or amend except as required pursuant to the terms of any outstanding equity-based awardsthereof, (ivvii) take any action to accelerate the vesting or payment, or fund or in payment of any other way secure the payment, of compensation or benefits under any West Compensation and Benefit PlanPlans, to the extent not already provided required in any such West Compensation and Benefit Plan, (vviii) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any West Compensation and Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; , (ix) amend the terms of any outstanding equity-based award, (x) provide for accelerated vesting, removal of restrictions or exercisability of any stock based or stock related awards (including stock options, stock appreciation rights, performance units and restricted stock units) upon a change in control occurring on or prior to the Effective Time, or (vixi) forgive enter into any loans new collective bargaining agreements (or material amendments to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIAexisting collective bargaining agreements);
(r) decrease or defer in any material respect the level of training provided to the employees of West or any of its Subsidiaries or the level of costs expended in connection therewith;
(s) fail to keep in effect any governmental route authority in effect and used by any Subsidiary of West as of the date of this Agreement, provided that the restrictions set forth in this Section 4.1(i)(s) shall not apply to any such failure if such failure occurs in the ordinary course of business consistent with past practice;
(t) make any material West Route changes, other than changes in the ordinary course of business consistent with past practice;
(u) fail to maintain insurance at levels at least comparable to current levels or otherwise in a manner inconsistent with past practice;
(v) take any action, or fail to take action, which action or failure could result in the loss of West Slots with an aggregate value in excess of $10,000,000;
(w) fail to notify East in writing of any incidents or accidents occurring on or after the date hereof involving any property owned or operated by West that resulted or could reasonably be expected to result in damages or losses in excess of $10,000,000;
(x) fail to continue, in respect of all West Aircraft, all material maintenance programs consistent with past practice (except as required or permitted by applicable Law), including using reasonable best efforts to keep all such West Aircraft in such condition as may be necessary to enable to airworthiness certification of such West Aircraft under the Federal Aviation Act to be maintained in good standing at all times;
(y) agree or commit to do any of the foregoing.
(ii) East shall not knowingly take or permit any of its Subsidiaries to take any action that is or refrain from taking any action the result of which would be reasonably likely expected to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do result in any of the foregoing.closing conditions set forth in Sections 5.1 and 5.2 not to be satisfied. East covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time, unless West shall otherwise approve in writing (such approval not to be unreasonably withheld or delayed), and except as otherwise expressly contemplated by this Agreement or as required by applicable Laws, its business and that of its Subsidiaries shall be conducted in the ordinary and usual course and, to the extent consistent therewith, it shall, and shall cause its Subsidiaries to, use their respective reasonable best efforts to preserve their business organizations intact and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business associates and keep available the services of the present employees and agents of East and its Subsidiaries. Without limiting the generality of the foregoing and in furtherance thereof, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly required by this Agreement or applicable Laws, (B) as West may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 4.1(ii) of the East Disclosure Letter, East will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its certificate of incorporation or by-laws or other applicable governing instruments or amend any term of the East Common Stock;
(b) merge or consolidate East or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of East that are not obligors or guarantors of third-party indebtedness, or adopt a plan of liquidation;
(c) acquire assets outside of the ordinary course of business with a value or purchase price in excess of $10,000,000 in the aggregate, other than acquisitions pursuant to Contracts to the extent in effect immediately prior to the execution of this Agreement and as otherwise set forth in Section 4.1(ii)(c) of the East Disclosure Letter, and other than capital expenditures within East's capital expenditure budget as set forth in Section 4.1(ii)(j) of the East Disclosure Letter;
(d) other than as set forth in Section 4.1(ii)(d) of the East Disclosure Letter and other than the issuance of shares or options pursuant to stock-based benefit plans and under individual employment agreements to which East is a party, issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of East or any its Subsidiaries (other than the issuance of shares by a wholly owned Subsidiary of East to East or another wholly owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants, conversion rights, stock appreciation rights, redemptio
Appears in 1 contract
Interim Operations. The (a) Except as required by applicable Law or as expressly provided by this Agreement, the Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof of this Agreement and prior to the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this AgreementTime, each the business of the Company it and its Subsidiaries shall conduct its business be conducted in all material respects in the ordinary and usual course consistent with past practice and it and its Subsidiaries shall use their respective commercially reasonable efforts to preserve the material components of their business organizations intact its and maintain existing relations and goodwill with Governmental Entities, material customers, material suppliers, licensors, licensees, distributors, creditors and lessors, key employees and independent contractors, and material service providers, agents and business organization and relationships with third parties associates and keep available the services of its and its Subsidiaries’ present officers and key employees; provided, however, that, except as set forth on Section 6.2 to the Company Disclosure Schedules, the Company and its Subsidiaries shall be under no obligation to and shall not, without Parent’s prior written consent, put in place any new retention programs or include additional personnel in any existing retention programs. Without limiting the generality of the foregoingimmediately preceding sentence, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted required by this Agreement, (B) as with the prior written consent of Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 6.2 of the Company Disclosure LetterSchedule, the Company will not and will not permit its Subsidiaries to:
(ai) adopt or propose any change in or amendment (whether by merger, consolidation or otherwise) to its articles of incorporation or bylaws or other applicable governing instrumentsinstruments of the Company and its Subsidiaries;
(bii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions solely among wholly owned Subsidiaries of the Company not in violation of any instrument binding on the Company or restructureany of its Subsidiaries and that would not reasonably be expected to result in a material increase in the net Tax liability of the Company and its Subsidiaries, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessestaken as a whole;
(ciii) acquire, directly or indirectly, whether by purchase, merger, consolidation or acquisition of stock or assets or otherwise, any assets, securities, properties, interests, or businesses or make any investment (whether by purchase of stock or securities, contributions to capital, loans to, or property transfers), in each case, other than (A) acquisitions of raw materials, supplies, equipment, inventory, third party Software and capital in accordance the ordinary course of business consistent with benefits outstanding prior to past practice (it being understood and agreed that the acquisition of all or substantially all of the assets of any Person is not in the ordinary course of business), or (B) acquisitions with a value or purchase price (including the value of assumed liabilities) not in excess of $250,000 in any transaction or related series of transactions or $750,000 in the aggregate, or as required by the terms of Contracts as in effect as of the date hereof under of this Agreement that are listed in Section 6.2(a)(ii) of the Company Stock Plans, Disclosure Schedule;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any (A) shares of capital stock of the Company or any of its SubsidiariesSubsidiaries (other than (1) the issuance, sale, pledge, disposition, grant, transfer, lease, license, guaranty or encumbrance of shares by any wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary or (2) the issuance or transfer of Shares pursuant to awards outstanding as of the date of this Agreement under, and as required by the terms of the Stock Plans and the award agreements as in effect as of the date of this Agreement), (B) securities convertible or exchangeable into or exercisable exercisable, exchangeable or redeemable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible convertible, exercisable, exchangeable or exchangeable redeemable securities, or (C) any Voting Debt;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(fv) make any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-wholly owned Subsidiary of the Company) in excess of $50,000 250,000 in any transaction or series of related transactions or $500,000 in the aggregateaggregate other than loans or advances to employees of the Company or any of its Subsidiaries in the ordinary course of business consistent with past practices;
(gvi) amend, supplement, replace, refinance, terminate or otherwise modify that certain Credit Agreement, dated as of July 12, 2013 (the “▇▇▇▇▇ Fargo Credit Facility”) among Krispy Kreme Doughnut Corporation, Krispy Kreme Doughnuts, Inc., the Lenders party thereto and ▇▇▇▇▇ Fargo Bank, National Association, as administrative agent (as such agreement may be further amended, amended and restated, supplemented, extended, refinanced, renewed, replaced or otherwise modified from time to time);
(vii) declare, authorize, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary of the Company to the Company or to any other direct or indirect wholly-wholly owned SubsidiarySubsidiary of the Company) or enter into any agreement Contract with respect to the voting of such its capital stockstock other than proxies or voting agreements solicited by the Company to obtain the Requisite Company Vote;
(hviii) other than as required by Section 5.1(r)adjust, reclassify, split, combinecombine or subdivide, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such its capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(iix) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letterincur, incur alter, amend or modify any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for the incurrence of indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) practice not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt 500,000 in the aggregate;
(jx) except as set forth make or authorize any capital expenditures materially in excess of the amount reflected in the Company’s capital budgets set forth in expenditure budget attached to Section 6.1(j6.2(a)(x) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month periodSchedule;
(kxi) make any material changes with respect to accounting policies or procedures, except as required to comply with, or to comply with by changes in, in applicable GAAP;
(lxii) subject to Section 6.14, release, assign, compromise, discharge, waive, settle or satisfy any litigation Action (including any Action relating to this Agreement or the Merger) or other proceedings before a Governmental Entity rights, claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) for an amount not covered by insurance in excess of $200,000 250,000 individually or $500,000 in the aggregate or providing for any obligation or liability of the Company relief other than monetary relief (except for confidentiality, non-disparagement, releases, agreements not to ▇▇▇ and other similar provisions in excess of such amounta settlement agreement);
(mxiii) makeamend or modify, adopt in any material respect, or terminate any Material Contract, Company Lease or material Company Permit or enter into any Contract that would have been a Material Contract had it been entered into prior to the execution of this Agreement, in each case other than in the ordinary course of business (provided that, solely for purposes of this Section 6.2(a)(xiii), the dollar thresholds in Section 4.10(a)(ii) of the definition of “Material Contracts” shall be deemed to refer to $1,000,000 individually and $2,000,000 in the aggregate);
(xiv) make any material Tax election, amend any Tax Return with respect to a material amount of Taxes, settle or finally resolve any controversy with respect to a material amount of Taxes or change any material method of Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Dateaccounting;
(nxv) (A) with regard to Intellectual Property, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material Intellectual Property, other than non-exclusive licenses granted in the ordinary course of business consistent with past practice; and (B) with regard to other assets, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon, create or incur any Lien (other than Permitted Encumbrances) on or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights, product lines lines, businesses or businesses interests therein of the Company or its Subsidiaries, including capital stock except, with respect to the foregoing clause (B), (x) in connection with sales of any of its Subsidiaries, except for sales Company products or rental dispositions of inventory in the ordinary course of business, business (y) sales or other dispositions of obsolete assets and or (z) sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in any transaction or series of related transactions or $750,000 in the aggregate, aggregate (inclusive of any sales or dispositions made pursuant to clauses (x) or (y) of this paragraph);
(xvi) terminate any executive officers (other than pursuant for cause) or hire any new employees unless such hiring is in the ordinary course of business consistent with past practice and is with respect to Contracts employees having an annual base salary and annual target incentive opportunity not to exceed $300,000 in effect prior to the date of this aggregate for such employee;
(xvii) adopt, enter into, amend, terminate or extend any Collective Bargaining Agreement;
(oxviii) except as required pursuant to existing writtenthe terms of this Agreement, binding agreements or policies a Company Benefit Plan as in effect prior to as of the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure LetterAgreement, or as otherwise required by applicable Law, (iA) grant or provide any severance or termination payments or benefits to any director, officer or officer, consultant or, other than in the ordinary course of business, employee (who is not an officer) of the Company or any of its Subsidiaries, (iiB) increase the compensation, bonus or pension, welfare, severance severance, change-in-control or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or officer, consultant or, other than in the ordinary course of business, employee (who is not an officer) of the Company or any of its Subsidiaries, exceptSubsidiaries other than, in the case of employees an employee (who are is not officersan officer), base salary increases or spot or other similar bonuses awarded in the ordinary course of business consistent with past practice practices, (iiiC) establish, adopt, amend or terminate any Company Benefit Plan (except as required by Law) or amend the terms of any outstanding equity-based awards, (ivD) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Company Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Company Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (viE) forgive any loans to directors, officers or key employees of the Company or any of its Subsidiaries;
(pxix) take unless required by applicable Law, reclassify any action independent contractor as an employee of the Company or omit to take any action that is reasonably likely to result in any of its Subsidiaries who would have an annual base salary and annual target incentive opportunity exceeding $300,000 in the conditions to the Merger set forth in Article VII not being satisfiedaggregate;
(qxx) fail to use commercially reasonable efforts to renew or maintain the Insurance Policies or comparable replacement policies, other than in the ordinary course of business consistent with past practice;
(xxi) enter into any new line of business not related to coffee or baked goods;
(xxii) adopt, enter into or effect any plan of complete or partial liquidation, dissolution, reorganization or restructuring;
(xxiii) take any action that would, or would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is be reasonably likely to prevent to, individually or in the aggregate, prevent, materially delay or materially impede the consummation of the MergerMerger or the other transactions contemplated by this Agreement; or
(sxxiv) agree, authorize authorize, propose, commit or commit announce an intention to do any of the foregoing.
(b) Nothing contained herein shall give to Parent or Merger Sub, directly or indirectly, rights to control or direct the Company’s operations prior to the Effective Time in violation of applicable Law. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions hereof, complete control and supervision of its operations and shall not be required to obtain consent of Parent if it reasonably believes that doing so would violate applicable Law.
Appears in 1 contract
Interim Operations. The Except as set forth in Section 6.01 of the Company covenants and agrees as Disclosure Letter, required by Law or consented to itself and its Subsidiaries thatin writing in advance by Parent (such consent not to be unreasonably withheld, after conditioned or delayed), during the period from the date hereof and prior to until the earlier of the Effective Time (unless Parent and the valid termination of this Agreement pursuant to Section 9.01, the Company shall, and shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, cause each of the Company and its Subsidiaries shall conduct to, (x) carry on its business only in the ordinary course consistent with past practice and it shall of business, (y) use commercially reasonable efforts to preserve intact its current business organization and to preserve its relationships and goodwill with third parties customers, suppliers, employees, licensors, licensees, distributors, lessors and keep available others having significant business dealings with the services Company or any of its present officers Subsidiaries and employees(z) comply with applicable Law in all material respects. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 6.01 of the Company Disclosure Letter, required by Law or consented to in writing in advance by Parent (such consent not to be unreasonably withheld, conditioned or delayed), during the period from the date hereof until the earlier of the Effective Time and the valid termination of this Agreement pursuant to Section 9.01, the Company will not shall not, and will shall not permit any of its Subsidiaries to, directly or indirectly:
(ai) adopt declare, set aside or propose pay any change dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any Company Securities or Company Subsidiary Securities or set any record date therefor, other than dividends or distributions by a direct or indirect wholly owned Subsidiary of the Company to its articles parent (provided that neither the Company nor any of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate its Subsidiaries shall repatriate any material amount of cash as a dividend from any Subsidiary outside of the United States to the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesU.S. Subsidiaries);
(cii) other than in accordance with benefits outstanding prior to split, combine, reclassify or otherwise amend the date hereof under the terms of any Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, Securities or Company Subsidiary Securities or issue or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee issuance of any other securities in lieu of or encumbrance of, any in substitution for shares of capital stock of the Company Securities;
(iii) repurchase, redeem or otherwise acquire any its Subsidiaries, Company Securities or securities convertible or exchangeable into or exercisable for any shares of such capital stock, Company Subsidiary Securities or any options, warrants or other rights of any kind to acquire any such Company Securities or Company Subsidiary Securities, other than (A) the acquisition by the Company of shares of Company Common Stock in connection with the surrender of shares of Company Common Stock by holders of Company Stock Options in order to pay all or a portion of the exercise price of the Company Stock Options, (B) the withholding of shares of Company Common Stock to satisfy all or a portion of any Tax obligations with respect to Company Equity Awards, and (C) the acquisition by the Company of Company Equity Awards in connection with the forfeiture of such capital stock or such convertible or exchangeable securitiesawards;
(div) materially and adversely modifyissue, terminate deliver or renew sell any Material Contract shares of Company Securities or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend Securities or other distribution, payable in cash, stock, property voting securities or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectlyequity interests, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stockshares, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt voting securities or equity interests, any options, warrants or other rights to acquire any debt security such shares, voting securities, equity interests or convertible or exchangeable securities, any stock-based performance units, any Voting Company Debt or any other rights that give any person the right to receive any economic interest of a nature accruing to the holders of Company Common Stock, other than, in each case, (A) upon the exercise or settlement of Company Equity Awards outstanding on the date hereof or issuances pursuant to the ESPP, in each case in accordance with their terms as of the date hereof, (B) by a wholly owned Subsidiary of the Company of such Subsidiary’s capital stock to the Company or another wholly owned Subsidiary of the Company and (C) as described in Section 6.01(a)(iv) of the Company Disclosure Letter;
(v) mortgage, pledge, hypothecate, grant an easement with respect to, or otherwise encumber or restrict the use of Company Securities or Company Subsidiary Securities or assets, properties or rights (including Intellectual Property rights) of the Company or any of its Subsidiaries, or otherwise create, assume or suffer to exist any Liens thereupon except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries Permitted Liens and Liens granted as of the Company or (iv) interest rate swaps on customary commercial terms consistent date of this Agreement with past practice and not respect to exceed $250,000 of notional debt in the aggregateCompany’s Existing Credit Facility;
(jvi) except as set forth in amend the capital budgets set forth in Section 6.1(j) Company Certificate of Incorporation or the Company Bylaws or the comparable organizational documents of any Subsidiary of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month periodCompany;
(kvii) make acquire or agree to acquire from any changes with respect to accounting policies third person (A) by merging or procedures, except as required to comply consolidating with, purchasing an equity interest in or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability substantial portion of the Company assets of, making an investment in excess of such amount;
(m) makeor loan or capital contribution to or in any other manner, adopt any person or change any material Tax election or Tax accounting methodbusiness, or fail (B) any assets that are otherwise material to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or and its Subsidiaries, including capital stock of any of its Subsidiariesother than (x) inventory, except for sales supplies or rental of inventory raw materials acquired in the ordinary course of business, sales of obsolete (y) equipment and other assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in acquired as contemplated under the aggregate, other than Fixed Asset Plan as permitted pursuant to Contracts in effect prior to Section 6.01(a)(xi) below, and (z) any other assets for which the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required consideration payable by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries does not exceed $1,000,000 in the aggregate for all such assets;
(A) sell, lease, license, sub-license or otherwise dispose of, or otherwise encumber any of its properties, rights or assets (including Intellectual Property rights), other than (1) sales of inventory, licenses of Software or sales of professional services in the Ordinary Course of Business, (2) sales, relinquishment or other disposition of assets that are obsolete or that are no longer used in, or useful for, the conduct of the business of the Company and its Subsidiaries, in each case, in the Ordinary Course of Business, (ii3) increase the compensationsales, bonus or pensionlicenses, welfare, severance sublicenses or other benefits of, pay any bonus todispositions in the Ordinary Course of Business permitted under Contracts existing as of the date of this Agreement, or (4) sales of assets with a value of less than $500,000 individually or in a series of related transactions, or $1,000,000 in the aggregate; or (B) abandon or permit to lapse any Company Registered IP; provided, however, that in any of the foregoing cases described in clause (A) or (B), neither the Company nor any of its Subsidiaries will distribute or make available (including by contribution to an open source project or community) any new equity awards to any director, officer or employee of Software developed by the Company or any of its SubsidiariesSubsidiaries as Open Source Materials without first obtaining Parent’s prior written consent;
(ix) adopt or enter into any plan of complete or partial liquidation, exceptdissolution, in the case of employees who are not officersrestructuring, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial recapitalization or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees reorganization of the Company or any of its Subsidiaries;
(px) take (A) incur, create, assume or otherwise become liable for, any action Indebtedness (excluding letters of credit put in place, and capital leases entered into, in each case, in the Ordinary Course of Business) owed to any third person, or omit amend, modify or refinance any Indebtedness owed to take any action that is reasonably likely third person (excluding with respect to result letters of credit and capital leases in existence as of the date of this Agreement in the Ordinary Course of Business), (B) make any loans, advances or capital contributions to, or investments in, any other person, other than the Company or any of its wholly owned Subsidiaries (other than advances of expenses and other routine amounts to employees in the conditions Ordinary Course of Business) or (C) redeem, repurchase, prepay, defease, cancel or otherwise acquire any Indebtedness (other than letters of credit and capital leases in the Ordinary Course of Business);
(xi) purchase, or commit to purchase, fixed or other capital assets except as contemplated by and in accordance with the Merger FY18 Fixed Asset Plan set forth in Article VII not being satisfiedSection 6.01(a)(xi) of the Company Disclosure Letter (the “Fixed Asset Plan”), which Fixed Asset Plan was approved as part of the Company’s FY2018 AOP by the Company Board on February 16, 2017;
(qxii) take pay, discharge, settle or satisfy any action that material claims, liabilities or obligations (whether absolute, accrued, asserted or unasserted, contingent or otherwise), other than (A) the payment, discharge or satisfaction in the Ordinary Course of Business, or as required by their terms as in effect on the date hereof of claims, liabilities or obligations reflected or reserved against in the most recent audited financial statements (or the notes thereto) of the Company included in the Filed SEC Documents (for amounts not in excess of such reserves) or incurred since the date of such financial statements in the Ordinary Course of Business, (B) payment of severance or other termination benefits to employees in the Ordinary Course of Business to the extent otherwise permitted pursuant to Section 6.01(a)(xix), (C) payment of fees and expenses to Representatives of the Company incurred in connection with the transactions contemplated by this Agreement; or (D) compromises, settlements or agreements to settle any Action which would violate the CIAnot require Parent consent pursuant to Section 6.01(a)(xiii);
(rxiii) knowingly take commence any Action (other than any Action against Parent and Merger Sub with respect to the enforcement of this Agreement), or compromise, settle or agree to settle any Action made or pending by, or against, the Company or any of its Subsidiaries, other than the commencement or settlement of Actions in the Ordinary Course of Business that are unrelated to Intellectual Property Rights and involve only the payment by or to the Company or any of its Subsidiaries of money damages (net of insurance proceeds received) in an amount of no more than $1,000,000 individually or $5,000,000 in the aggregate; provided that the foregoing shall not permit the Company or any of its Subsidiaries to take settle any action Action (x) that would impose any restrictions or changes (other than de minimis restrictions or changes) to the business or operations of, or result in the imposition of equitable relief on, or require any admission of wrongdoing by, the Company or any of its Subsidiaries, or (y) for which such settlement is reasonably likely not permitted pursuant to prevent Section 7.02;
(A) enter into, terminate (except a termination of any Material Contract by its terms due solely to the consummation passage of time), cancel, amend in any material respect or modify in any material respect any Material Contract or enter into any Contract that, if in effect on the date hereof, would have been a Material Contract, excluding, in each of the foregoing cases but subject to the following proviso, any such Contract which (1) is or would constitute a Material Contract under subsections (ii), (iii), (iv) or (xii) of Section 4.11(a), (2) is a renewal of a Contract made available to Parent on terms no less favorable in all material respects in the aggregate to Company and its Subsidiaries than the terms of such Contract as made available to Parent, (3) is a customer Contract providing for the sale of Company Products, (4) is a distributor Contract providing for third-party distribution of Company Products or (5) is a supplier or vendor Contract providing for the supply of goods or services for use in the production of Company Products, so long as such supplier or vendor Contract does not require and would not reasonably be expected to result in any payments (whether made directly or indirectly via a third person) by the Company or any of its Subsidiaries to any counterparty to such Contract (or any of such counterparty’s Affiliates) in an aggregate amount in excess of $3,000,000 per Contract or series of related Contracts or $15,000,000 in the aggregate, in each case, in any fiscal quarter of the Company, with the foregoing threshold amounts to be pro rated for the remaining period of the current fiscal quarter as of the date of this Agreement; provided that no Contract described in any of the foregoing clauses (1) through (5) shall be so excluded from the restrictions of this Section 6.01(a) if such Contract is (or, if entered into prior to the date hereof, would have been) a Material Contract pursuant to subsection (v), (vi), (viii) or (ix) of Section 4.11(a); and provided, further that no Contract described in the foregoing clause (5) shall be so excluded from the restrictions of this Section 6.01(a) if such Contract contains any purchasing commitment by the Company or any of its Subsidiaries for a term in excess of six (6) months from the date thereof; (B) waive any material term of or any material default under, or release, settle or compromise any material claim against the Company or any of its Subsidiaries or any material liability or material obligation owing to the Company or any of its Subsidiaries under, any Material Contract (except, in each case, as permitted pursuant to Section 6.01(a)(xiii)); (C) enter into any Contract which contains a change of control or similar provision that would require a payment to the other party or parties thereto in connection with the Offer, the Merger, the Support Agreement or the other transactions contemplated herein (including in combination with any other event or circumstance); oror (D) amend or modify the Financial Advisor Agreement;
(sxv) agreechange its fiscal year or change any of its financial accounting methods, authorize principles or practices, except insofar as may have been required by a change in GAAP or applicable Law, or (other than as required by GAAP for any assets that are required to be marked-to-market on a periodic basis) revalue any of its material assets;
(xvi) (A) change any material method of Tax accounting or make, change or revoke any material Tax election, (B) file any material amended Tax Return or claim for Tax refund, (C) settle or compromise any material Tax liability or refund, (D) extend the statutory period of limitations with respect to the assessment or collection of any material Tax, (E) change any tax period, (F) prepare or file any material Tax Return other than on a basis consistent with past practice (except as otherwise required by a change in applicable Tax Law), or (F) enter into any “closing agreement” within the meaning of Section 7121 of the Code (or any similar provision of state, local or foreign law) or any Tax allocation, indemnification or sharing agreement (excluding any commercial agreements entered into in the ordinary course of business and not primarily relating to Taxes) or request any Tax ruling or Tax holiday;
(xvii) fail to keep in force insurance policies or replacement or revised provisions regarding insurance coverage with respect to the material assets, operations and activities of the Company and its Subsidiaries as currently in effect;
(xviii) enter into any new lease of real property involving payments of more than $200,000 in the aggregate per year, or amend the terms of any existing lease of real property that would require payments over the remaining term of such lease in excess of $200,000 per year, other than renewals of existing leases in the ordinary course of business;
(xix) except as required by the terms of any Company Benefit Plan as in effect on the date of this Agreement or as described in Section 6.01(a)(xix) of the Company Disclosure Letter, (A) increase the compensation or benefits payable or to become payable to any of its directors, officers, employees or individual independent contractors (except for annual merit increases in base salary of employees who are not officers in the Ordinary Course of Business by no more than 10% per individual and not to exceed 4.0% in the aggregate), (B) grant to any of its directors, officers, employees or individual independent contractors any increase in severance or termination pay, (C) pay or award, or commit to do pay or award, any bonuses or incentive compensation, (D) enter into any employment, consulting, severance, retention or termination agreement (including, for the avoidance of doubt, offer letters) with any of its directors, officers, employees or individual independent contractors, other than offer letters that do not provide any severance, retention, change in control or equity award commitments with new non-executive employee hires, and new contractor or consultant engagements, that are permitted under clause (H) or clause (I) hereof or in connection with any promotions of existing employees in the foregoing.Ordinary Course of Bus
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. The Company covenants and agrees Except (a) as to itself and its Subsidiaries thatotherwise expressly required or permitted by this Agreement or as required by Law, after (b) as Parent may approve in writing or (c) as set forth in Section 6.01 of the Community Disclosure Schedule, during the period from the date hereof and prior to of this Agreement until the earlier of the Effective Time (unless Parent or termination of this Agreement in accordance with Article 8, Community shall, and shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, cause each of the Company and its Subsidiaries shall to, (i) conduct its business in the ordinary course consistent with past practice and it shall in all material respects, (ii) use its commercially reasonable efforts to maintain and preserve intact its business organization and relationships advantageous business relationships, and goodwill with third parties Governmental Authorities, customers, suppliers, distributors, creditors, lessors, officers and employees and business associates and keep available the services of Community and its Subsidiaries’ present officers employees and employeesagents, (iii) maintain in full force and effect insurance comparable in amount and scope of coverage to that now maintained by it, and (iv) take no action that is intended to or would reasonably be expected to adversely affect or materially delay the ability of either Community or Parent to obtain any necessary approvals of any Governmental Authority required for the transactions contemplated hereby or to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby. Without limiting the generality of and in furtherance of the foregoing, from the date of this Agreement until the earlier of the Effective TimeTime or termination of this Agreement in accordance with Article 8, except (A) as otherwise expressly required or permitted by this AgreementAgreement or as required by Law, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 6.01 of the Company Community Disclosure LetterSchedule, the Company will Community shall not and will shall not permit any of its Subsidiaries to:
(ai) adopt Issue, sell or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Personotherwise permit to become outstanding, or restructure, reorganize dispose of or completely encumber or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize or propose the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance creation of, any additional shares of its capital stock of the Company or any its Subsidiariesstock, or securities convertible or exchangeable into into, or exercisable for for, any shares of such its capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities or receive a cash payment based on the value of any shares of such capital stock, (ii) permit any additional shares of its capital stock, or securities convertible or exchangeable into, or exercisable for, any shares of its capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities or receive a cash payment based on the value of any shares of such capital stock, to become be subject to new grant, or (iii) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its stock or other securities;.
(db) materially Make, declare, pay or set aside for payment any dividend on or in respect of, or declare or make any distribution on any shares of its capital stock, other than the declaration and adversely modifypayment of regular quarterly cash dividends not to exceed $0.50 per share made by Community to its shareholders on such payment dates (and based on such dividend record dates) as are consistent with Community’s past practice.
(c) Except with respect to contracts relating to loans made in the ordinary course of business, terminate amend or modify the material terms of, waive, release or assign any rights under, terminate, renew or allow to renew automatically, make any payment not then required under, fail to comply with or violate the terms of or enter into (i) any Material Contract Contract, Lease, Regulatory Agreement, CRA Agreement, or any Contract that would be a Material Contract if it were in existence on the date hereofhereof or other binding obligation that is material to Community and its Subsidiaries, (i) except in the ordinary course of businesstaken as a whole, or (ii) if consummation any restriction on the ability of Community or its Subsidiaries to conduct its business as it is presently being conducted or (iii) any Contract governing the terms of Community Common Stock or rights associated therewith or any other outstanding capital stock or any outstanding instrument of indebtedness, in each case which is not terminable at will or within sixty (60) calendar days or less notice without payment of any amount other than for products delivered or services performed through the date of termination.
(d) Except as Previously Disclosed on Section 6.01(d) of the transactions contemplated by this Agreement Community Disclosure Schedule, sell, transfer, mortgage, lease, guarantee, encumber, license, let lapse, cancel, abandon or compliance by the Company with the provisions otherwise create any Lien on or otherwise dispose of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or discontinue any of its Subsidiaries under such Contract; providedassets, howeverdeposits, that the foregoing shall not prohibit entering into, modifying business or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person properties (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect sales pursuant to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r6.01(p), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of which Section 6.01(p) will exclusively govern such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiariessales), except for indebtedness for borrowed money incurred sales, transfers, mortgages, leases, guarantees, encumbrances, licenses, lapse, cancellation, abandonments or other dispositions or discontinuances in the ordinary course of business consistent with past practices (i) practice and in a transaction that, together with other such transactions, does not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;100,000.
(je) except as set forth Acquire (other than by way of foreclosures or acquisitions of control in the capital budgets set forth a fiduciary or similar capacity or in Section 6.1(j) satisfaction of the Company Disclosure Letter and consistent therewithdebts previously contracted in good faith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory each case in the ordinary course of business) all or any portion of the assets, sales business, deposits or properties of obsolete assets and salesany other entity, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 except in the aggregateordinary course of business and in a transaction that, together with other than pursuant such transactions, is not material to Contracts in effect prior it and its Subsidiaries, taken as a whole, and would not reasonably be expected to present a material risk that the date of this Agreement;Closing Date will be materially delayed or that any requisite regulatory approvals will not be obtained.
(of) except as required pursuant to existing written, binding agreements Amend the Community Articles or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure LetterCommunity Bylaws, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee similar governing documents of the Company or any of its Subsidiaries, .
(iig) Except as and when required under applicable Law or the terms of any Employee Benefit Plan in effect as of the date hereof (taking into account actions required by Section 6.14) or as Previously Disclosed on Section 6.01(g) of the Community Disclosure Schedule:
(i) increase in any manner the compensation, bonus or pension, welfare, severance or other benefits of, pay of any bonus to, or make any new equity awards to any director, officer or employee of the Company current or any former directors, officers, employees or other service providers of Community or its Subsidiaries, exceptexcept for ordinary course merit-based increases in the base salary of employees (other than directors) consistent with past practice or as set forth in Section 6.01(g)(ii) below,
(ii) grant, pay or agree to pay any annual, quarterly, monthly or other bonus or other incentive compensation (excluding any severance, retention, retirement or termination pay, which shall be subject to clause (v) of this Section 6.01(g) below), other than:
(A) any bonuses and other incentive compensation that are paid or payable by Community on a quarterly or monthly basis during the year ending December 31, 2018 consistent in all material respects with the Community Incentive and Commission Plan, and
(B) any bonuses and other incentive compensation that are payable by Community on an annual basis for the year ending December 31, 2017, or for services rendered by the employees Community identified on Section 6.01(g)(ii)(B) of the Community Disclosure Schedule between the date of this Agreement and the Effective Time of the Merger, shall not exceed, in the case aggregate, the amounts accrued as of employees who are not officersDecember 31, 2017 on the Community Financial Statements,
(iii) become a party to, establish, amend, alter a prior interpretation of in a manner that enhances rights or materially increases costs, commence participation in, terminate or commit itself to the adoption of any Employee Benefit Plan (including the Community Incentive and Commission Plan) or plan that would be an Employee Benefit Plan if in effect as of the date hereof, other than de minimis amendments in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend as required pursuant to the terms of any outstanding equity-based awards, such Employee Benefit Plan,
(iv) grant (or commit to grant) any new equity award,
(v) grant, pay or increase (or commit to grant, pay or increase) any severance, retention, retirement or termination pay, other than pursuant to (i) the Employee Benefit Plans in effect as of the date hereof as listed on Section 6.01(g)(v)(i) of the Community Disclosure Schedule; and (ii) a pool for retention payments to the Community employees (other than any Community employee listed on Section 6.01(g)(ii)(B) of the Community Disclosure Schedule) by Community to be mutually agreed upon by the Parties in an amount not exceeding the amount set forth in Section 6.01(g)(v)(ii) of the Community Disclosure Schedule, and provided further that, except for those individuals and those amounts specifically set forth on
Section 6.01 (g)(v)(ii) of the Community Disclosure Schedule, no retention award or retention payment shall be made by Community pursuant to such retention pool unless the terms and conditions of such retention award and payment (including (A) the selection of each participant, (B) each participant’s proposed retention payment amount, (C) the employment and other conditions that each participant must satisfy before payment is due and (D) the timing for each retention payment) have been approved by Parent,
(vi) accelerate the payment or vesting of, or lapsing of restrictions with respect to, any stock-based compensation (including the RSUs), long-term incentive compensation, deferred compensation or any bonus or other incentive or deferred compensation,
(vii) cause the funding of any rabbi trust or similar arrangement or take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, payment of compensation or benefits under any Employee Benefit Plan,
(viii) terminate the employment or services of any executive officer other than for cause,
(ix) enter into any collective bargaining or other agreement with a labor organization,
(x) forgive or issue any loans to any current or former officer, employee or director of Community or its Subsidiaries, or
(xi) hire any officer, employee or other service provider except in the ordinary course of business consistent with past practices, including as a result of vacancies arising on or after the date hereof.
(h) Knowingly take, or omit to take, any action that would prevent or impede, or could reasonably be expected to prevent or impede, the extent Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.
(i) (i) Incur or guarantee any indebtedness for borrowed money, other than in amounts and at maturities in the ordinary course of business consistent with past practice, and provided further that the maturity period for any such indebtedness shall not already provided exceed a period of ninety (90) days from the date of incurrence of such indebtedness or (ii) assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations of any other Person (other than the endorsement of checks, commercial paper, bankers acceptances and bank drafts in the ordinary course of business consistent with past practice).
(j) Enter into any new line of business or make any material change in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations basic policies and practices with respect to pricing or risk profile of loans, deposits and services, liquidity management and cash flow planning, marketing, deposit origination, lending, budgeting, profit and tax planning, personnel practices or any Benefit Plan other material aspect of Community’s or to change the manner in which contributions to such plans are made its Subsidiaries’ business or the basis on which such contributions are determinedoperations, except as may be required by GAAP; Law or requested by any Governmental Authority;
(vii) forgive any loans to directors, officers or employees Other than in accordance with the investment policies of the Company Community or any of its Subsidiaries;Subsidiaries in effect on the date hereof or in securities transactions as provided in (ii) below, make any investment either by contributions to capital, property transfers or purchase of any property or assets of any Person, (ii) other than purchases of direct obligations of the United States of America or obligations of United States government agencies which are entitled to the full faith and credit of the United States of America, in any case with a remaining maturity at the time of purchase of one year or less, purchase or acquire securities of any type; or (iii) materially change the composition of the Investment Securities in its securities portfolio, including any changes in the credit quality or the duration of the Investment Securities; provided, however, that in the case of Investment Securities, Community may purchase Investment Securities if, within two (2) Business Days after Community requests in writing (which request shall describe in detail the investment securities to be purchased and the price thereof) that Parent consent to making of any such purchase, Parent has approved such request in writing (which consent will not be unreasonably withheld) or has not responded in writing to such request.
(l) Except as set forth in Section 6.01(l) of the Community Disclosure Schedule, enter into any settlement, compromise or similar agreement with respect to, any action, suit, claim, proceeding, order or investigation to which Community or any of its Subsidiaries is or become a party after the date of this Agreement, which settlement, compromise, agreement or action, suit, claim, proceeding, order or investigation that is settled in an amount and for consideration not in excess of $100,000 individually or $250,000 in the aggregate and that would not (i) impose any material restriction on the business of the Surviving Corporation or (ii) create adverse precedent for claims that are reasonably likely to be material to it or its Subsidiaries taken as a whole.
(m) Other than as determined to be necessary or advisable by Community in the good faith exercise of its discretion based on changes in market condition and subject in any event to clause (u) below of this Section 6.01, alter materially its interest rate or pricing fee or fee pricing policies with respect to depository accounts of any of its Subsidiaries or waive any material fees with respect thereto.
(n) Except as required by applicable Law or by a Governmental Authority, (i) implement or adopt any material change in its interest rate and other risk management policies, procedures or practices or (ii) fail to follow in all material respects, Community’s or its applicable Subsidiary’s existing policies or practices with respect to managing its exposure to interest rate and other risk.
(o) Grant or commit to grant any new extension of credit to (i) any existing obligor, if such extension of credit would equal or exceed (a) $5,000,000 if Community’s aggregate relationship exposure to such obligor, including as a result of such extension, is less than $15,000,000 or (b) $2,500,000 if Community’s aggregate exposure to such obligor equals or exceeds, or would equal or exceed, as a result of such credit extension, $15,000,000 or (ii) any new obligor if such extension of credit would equal or exceed $5,000,000 (in each case, consent shall be deemed granted if within three (3) Business Days of written notice delivered to Citizens’ Chief Credit Officer or his designee, notice of objection is not received by Community).
(p) take Sell any action or omit to take real estate owned, charge-off any action that is reasonably likely to result in assets, make any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take compromises on debt, release any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize collateral on loans or commit to do any of the foregoing, if such sale, charge-off, compromise or release would exceed $250,000 in the aggregate (consent shall be deemed granted if within three (3) Business Days of written notice delivered to Citizens’ Chief Credit Officer or his designee, notice of objection is not received by Community).
(q) Renew or commit to renew any extension of credit that would equal or exceed: (i) $500,000 if rated Substandard; (ii) $1,000,000 if rated Special Mention; (iii) $5,000,000 if rated Pass (including Pass/Watch); (iv) $2,500,000 if the aggregate relationship exposure equals or exceeds $15,000,000 (consent shall be deemed granted if within three (3) Business Days of written notice delivered to Citizens’ Chief Credit Officer or his designee, notice of objection is not received by Community).
(r) Purchase or commit to purchase any Loan or participation
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing, and except as otherwise expressly contemplated by this Agreement) and except as required by applicable Laws or as provided for in this AgreementLaws, each the business of the Company it and its Subsidiaries shall conduct its business be conducted in the ordinary and usual course consistent with past practice and, to the extent consistent therewith, it and it its Subsidiaries shall use reasonable their respective best efforts to preserve their business organizations intact its and maintain existing relations and goodwill with Governmental Entities, customers, suppliers, distributors, creditors, lessors, employees and business organization and relationships with third parties associates and keep available the services of its and its Subsidiaries’ present officers employees and employeesagents. Without limiting the generality of the foregoing, and in furtherance thereof, from the date of this Agreement hereof until the Effective Time, except (A) as otherwise expressly permitted required by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will shall not and will shall not permit its Subsidiaries to:
(ai) adopt or propose any change in its articles certificate of incorporation or bylaws by-laws or other applicable governing instruments;
(bii) merge or consolidate the Company or any of its Subsidiaries with any other Person, except for any such transactions among wholly-owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(ciii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $100,000 in any transaction or series of related transactions, other than acquisitions pursuant to Contracts in accordance with benefits outstanding prior to effect as of the date hereof under the Company Stock Plans, hereof;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guarantee, or encumbrance of, any shares of capital stock of the Company or any of its SubsidiariesSubsidiaries (other than the issuance of shares by a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary), or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities, except pursuant to the exercise of Warrants or Options as contemplated by this Agreement;
(dv) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets not incurred in the ordinary course of the Company or any of its Subsidiaries having a value in excess of $50,000business consistent with past practice;
(fvi) make any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 100,000 in the aggregate;
(gvii) (A) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary; (B) repurchase, redeem or otherwise reacquire any shares of capital stock or other securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any of its capital stock or other securities or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other securities, except for any split, combination or reclassification of capital stock of a wholly-owned Subsidiary of the Company, or any issuance or authorization or proposal to issue or authorize any securities of a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company, or (C) enter into any agreement with respect to the voting of such its capital stock;
(hviii) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt 100,000 in the aggregate;
(jix) except as set forth in the capital budgets set forth in Section 6.1(j6.1(i)(ix) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during aggregate
(x) enter into any 12 month periodContract that would have been a Material Contract had it been entered into prior to this Agreement;
(kxi) make any changes with respect to accounting policies or procedures, except as required to comply with, by changes in applicable generally accepted accounting principles or to comply with changes in, GAAPas recommended by the Company’s independent public auditors;
(lxii) settle any litigation actions, suits, claims, hearings, arbitrations, investigations or other proceedings before a Governmental Entity for an amount in excess of $200,000 100,000 or any obligation or liability of the Company in excess of such amount;
(mxiii) amend, modify or terminate any Material Contract, or cancel, modify or waive any material debts or claims held by it or waive any material rights;
(xiv) (A) make, change, or rescind any material Tax election, (B) file any material amended Tax Return of the Company or any of the Subsidiaries, (C) or adopt or change any material method or period of Tax election accounting, (D) settle or Tax accounting method, or fail compromise any material claim relating to timely Taxes; (taking E) surrender any claim for a refund of Taxes; (F) enter into account all applicable extensionsany closing agreement relating to Taxes; (G) file all any material Tax Return that is inconsistent with past practice; (H) consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment (other than pursuant to extensions of time to file Tax Returns required to be filed, and pay all Taxes required to be paid, on or before obtained in the Closing Dateordinary course of business);
(nxv) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, licenses, operations, rights, product lines lines, businesses or businesses interests therein of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in connection with services provided in the ordinary course of business, business and sales of obsolete assets and except for sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 100,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreementhereof;
(oxvi) assign or grant an exclusive license of any material right in any Intellectual Property of the Company necessary or useful for the manufacture, use, sale, offer for sale or export of any Medical Device or that otherwise enables a third party to compete with the Company with respect to the manufacture or sale of any product that competes with any Medical Device;
(xvii) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and hereof, as set forth in Section 5.1(h5.1(h)(i) of the Company Disclosure Letter, or as otherwise required by applicable Law, (iA) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (iiB) increase in any manner the compensation, bonus or bonus, pension, welfare, fringe, severance or other benefits of, pay any bonus to, or make any new equity awards to any current or former director, officer officer, employee or employee consultant of the Company or any of its Subsidiaries, except(C) become a party to, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, commence participation in, amend or terminate any Benefit Plan stock option plan or other stock-based compensation plan, or any compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement with or for the benefit of any current or former directors, officers, employees or consultants of the Company or its Subsidiaries (or newly hired employees) or amend the terms of any outstanding equity-based awards, (ivD) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (vE) enter into any collective bargaining agreement or other agreement with a labor union, works council or similar organization, (F) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vivii) forgive any loans or issue any loans to directors, officers or employees of the Company or any of its Subsidiaries;.
(pxviii) take any action or omit to take any action that is would reasonably likely be expected to result in any of the Tender Offer Conditions or the conditions to the Merger set forth in Article VII VIII not being satisfied;; or
(qxix) take agree, authorize or commit to do any action that would violate of the CIA;foregoing.
(rb) Prior to making any written or oral communications to the directors, officers or employees of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that are affected by the Transactions, the Company shall provide Parent with a copy of the intended communication, Parent shall have a reasonable period of time (but in any event no more than three (3) business days) to review and comment on the communication, and Parent and the Company shall cooperate in providing any such mutually agreeable communication.
(c) Parent shall not knowingly take or permit any of its Subsidiaries to take any action that is would reasonably likely be expected to prevent the consummation of the Merger; or.
(sd) agreeThe Company shall (i) consult with Parent in connection with any proposed meeting with the FDA or any other Governmental Entity relating to any Medical Device, authorize (ii) promptly inform Parent of, and provide Parent with a reasonable opportunity to review, any material filing proposed to be made by or commit to do on behalf of any of the foregoingCompany or any of its Subsidiaries, and any material correspondence or other material communication proposed to be submitted or otherwise transmitted to the FDA or any other Governmental Entity by or on behalf of any of the Company or any of its Subsidiaries, (iii) keep Parent promptly informed of (A) any communication (written or oral) with or from the FDA and any other Governmental Entity and (B) any material communications (written or oral) received from any Person relating to the Intellectual Property of the Company, (iv) promptly inform Parent and provide Parent or Merger Sub with a reasonable opportunity (but no more than three (3) business days) to comment, in each case, prior to making any material change to any study protocol, adding any new trial, making any material change to a manufacturing plan or process, making any material change to a development timeline or initiating, or making any material change to, promotional or marketing materials or activities relating to any Medical Device, and (v) cooperate with, and provide reasonable access to, Parent’s representative for purposes of reviewing and assessing the Company’s compliance with any and all relevant Laws, compliance programs, and procedures, and give due consideration to any resulting recommendations provided by Parent’s representative.
Appears in 1 contract
Interim Operations. (a) The Company covenants shall, and agrees as to itself and shall cause each of its Subsidiaries thatto, from and after the date hereof of this Agreement and prior to the Effective Time (unless Parent and Merger Sub shall otherwise approve in writing) , with such approval not to be unreasonably withheld, conditioned or delayed), and except as otherwise expressly required by this Agreement or as required by applicable Laws or as provided for in this AgreementLaw, each of the Company and its Subsidiaries shall conduct its business in the ordinary course Ordinary Course of Business and, to the extent consistent with past practice and it therewith, shall use and cause each of its Subsidiaries to use their respective reasonable best efforts to to, preserve its and their business organizations intact its and maintain satisfactory relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business organization and relationships with third parties associates and keep available the services of its and its Subsidiaries’ present officers employees and employeesagents. Without limiting the generality of and in furtherance of the foregoingforegoing sentence, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted required by this Agreement, (B) required by applicable Law, or as Parent may approve approved in writing (by Parent, with such approval not to be unreasonably withheld withheld, conditioned or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will shall not and will not permit shall cause its Subsidiaries not to:
(ai) adopt or propose any change in its articles Organizational Documents other than pursuant to the transactions contemplated by this Agreement;
(ii) issue, sell, pledge, dispose of, grant, transfer, lease, license, guarantee, Encumber, or otherwise enter into any Contract or understanding with respect to the voting of, any shares of incorporation capital stock of the Company (including, for the avoidance of doubt, Company Shares) or bylaws of any of its Subsidiaries, securities convertible or exchangeable into or exercisable for any such shares of capital stock, or any options, warrants or other applicable governing instrumentsrights of any kind to acquire any such shares of capital stock or such convertible or exchangeable securities, other than the issuance of shares of capital stock (A) by a Wholly Owned Subsidiary of the Company to the Company or another Wholly Owned Subsidiary of the Company, or (B) in respect of Preferred Shares, Company Options, Warrants and Management Options outstanding as of the date of this Agreement or issued after the date of this Agreement in each case in accordance with their terms, (C) as applicable, the Incentive Plan as in effect on the date of this Agreement, and (D) the Series C Financing;
(iii) enter into any Contracts or other arrangements between the Company or any of its Subsidiaries, on the one hand, and any director or officer of the Company or any Person beneficially owning five percent or more of the outstanding Company Shares (on a fully diluted basis) or shares of common stock of any of their respective Affiliates, on the other hand, except for compensatory arrangements entered into in the Ordinary Course of Business with Company Employees and transactions with its Affiliates;
(iv) create or incur any Encumbrance that is not incurred in the Ordinary Course of Business on any of the assets of the Company or any of its Subsidiaries;
(v) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock, except for (A) dividends paid by any Wholly Owned Subsidiary to the Company or to any other Wholly Owned Subsidiary of the Company;
(vi) reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its capital stock or securities convertible or exchangeable into or exercisable for any shares of its capital stock;
(vii) amend, modify, terminate, cancel or let lapse an Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement self-insurance programs are established by the Company or one or more of its Subsidiaries or replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing are in full force and effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed Insurance Policies for substantially similar premiums, as applicable, as in effect as of the date of this Agreement;
(viii) make any changes with respect to the legal structure of the Company and its Subsidiaries or to their accounting policies or procedures, except as required by changes in GAAP;
(ix) make, change or revoke any Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any Tax claim, audit, assessment or dispute, surrender any right to claim a refund or take any action which would be reasonably expected to result in an increase in the Tax liability of the Company or its Subsidiaries, or, in respect of any taxable period (or portion thereof) ending after the Closing Date, the Tax liability of Parent, Merger Sub or their Affiliates;
(x) cancel, abandon or otherwise allow to lapse or expire any Company Intellectual Property Rights, except in the Ordinary Course of Business with respect to Intellectual Property Rights that are not material to any business of the Company or any of its Subsidiaries;
(xi) become party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, labor organization, works council or similar organization;
(xii) fail to maintain policies and procedures designed to ensure compliance with the FCPA and Other Anti-Bribery Laws;
(xiii) fail to maintain policies and procedures designed to ensure compliance with the Export and Sanctions Regulations in each jurisdiction in which the Company and its Subsidiaries operate or are otherwise subject to jurisdiction;
(xiv) take any action or fail to take any action that is reasonably expected to result in any of the conditions to the Merger set forth in Article VIII not being satisfied; or
(xv) agree, authorize or commit to do any of the foregoing.
(b) Nothing set forth in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or its Subsidiaries’ operations prior to the Effective Time or give the Company, directly or indirectly, the right to control or direct Parent’s or its Subsidiaries’ operations prior to the Effective Time.
(c) Parent shall, and shall cause each of its Subsidiaries to, from and after the date of this Agreement and prior to the Effective Time (unless the Company shall otherwise approve in writing, with such approval not to be unreasonably withheld, conditioned or delayed), and except as otherwise expressly required by this Agreement or as required by applicable Law, conduct its business in the Ordinary Course of Business and, to the extent consistent therewith, shall use and cause each of its Subsidiaries to use their respective reasonable best efforts to, preserve its and their business organizations intact and maintain satisfactory relations and goodwill with Governmental Entities, customers, suppliers, licensors, licensees, distributors, creditors, lessors, employees and business associates and keep available the services of its and its Subsidiaries’ present employees and agents. Without limiting the generality of and in furtherance of the foregoing sentence, from the date of this Agreement until the Effective Time, except as otherwise expressly required by this Agreement, required by applicable Law, required by the express terms of any material contract made available to Company, as approved in writing by Company, with such approval not to be unreasonably withheld, conditioned or delayed, or set forth in the corresponding subsection of Section 7.1(c) of the Parent Disclosure Letter, Parent shall not and shall cause its Subsidiaries not to:
(i) adopt or propose any change in its Organizational Documents;
(ii) merge or consolidate the Company Parent or any of its Subsidiaries with any other Person, except for any such transactions solely among Wholly Owned Subsidiaries of the Company, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(ciii) acquire assets from any other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, Person;
(iv) issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee guarantee, Encumber, or encumbrance otherwise enter into any Contract or understanding with respect to the voting of, any shares of capital stock of the Company Parent or of any of its Subsidiaries, or securities convertible or exchangeable into or exercisable for any such shares of such capital stock, or any options, warrants or other rights of any kind to acquire any such shares of such capital stock or such convertible or exchangeable securities, other than the issuance of shares of capital stock by a Wholly Owned Subsidiary of Parent to Parent or another Wholly Owned Subsidiary of Parent;
(dv) materially and adversely modify, terminate enter into any Contracts or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or other arrangements between Parent or any of its Subsidiaries under such Contract; providedSubsidiaries, howeveron the one hand, that and any director or officer of Parent or any Person beneficially owning five percent or more of the foregoing shall not prohibit entering into, modifying outstanding Company Shares or renewing the Contracts in the ordinary course shares of business to the extent such Contracts can be terminated after common stock of any such entering into, modification or renewal at a cost of less than $200,000their respective Affiliates;
(evi) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to Encumbrance that is not incurred in the Company Ordinary Course of Business on any of the assets of Parent or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000Subsidiaries;
(fvii) make any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than the Company to or from Parent and any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregateits Wholly Owned Subsidiaries);
(gviii) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (stock, except for (A) dividends paid by any direct or indirect wholly-owned Wholly Owned Subsidiary to the Company Parent or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting Wholly Owned Subsidiary of such capital stockParent;
(hix) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such its capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(ix) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness material Indebtedness (including the issuance of another Person, or issue or sell any debt securities or securities, warrants or other rights to acquire any debt security security);
(xi) enter into any Contract other than Contracts entered into in the Ordinary Course of the Company Business with payment obligations not to exceed $50,000;
(xii) cancel, modify or waive any debts or claims held by Parent or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with Subsidiaries or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregatewaive any material rights;
(jxiii) except amend, modify, terminate, cancel or let lapse an Insurance Policy, unless simultaneous with such termination, cancellation or lapse, replacement self-insurance programs are established by Parent or one or more of its Subsidiaries or replacement policies underwritten by insurance and reinsurance companies of nationally recognized standing are in full force and effect, in each case, providing coverage equal to or greater than the coverage under the terminated, canceled or lapsed Insurance Policies for substantially similar premiums, as set forth applicable, as in effect as of the date of this Agreement;
(xiv) other than settlement of trade accounts payable in the capital budgets set forth in Section 6.1(j) Ordinary Course of the Company Disclosure Letter and consistent therewithBusiness, make settle or authorize compromise any capital expenditure Proceeding for an amount in excess of $200,000 20,000 individually or $50,000 in the aggregate during any 12 month periodcalendar year;
(kxv) make any changes with respect to the legal structure of the Company and its Subsidiaries or to their accounting policies or procedures, except as required to comply with, or to comply with by changes in, in GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(mxvi) make, change or revoke any Tax election, change an annual Tax accounting period, adopt or change any material Tax election or Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, settle any Tax claim, audit, assessment or fail dispute, surrender any right to timely claim a refund or take any action which would be reasonably expected to result in an increase in the Tax liability of the Company or its Subsidiaries, or, in respect of any taxable period (taking into account all applicable extensionsor portion thereof) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before ending after the Closing Date, the Tax liability of Parent, Merger Sub or their Affiliates;
(nxvii) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire expire, or otherwise dispose of or transfer, or permit or suffer to exist the creation of any assetsEncumbrance upon, any assets (tangible or intangible, including any Intellectual Property Rights and Programs), Licenses, product lines or businesses of the Company or any of its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in connection with services provided in the ordinary course Ordinary Course of business, Business or sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreementassets;
(oxviii) cancel, abandon or otherwise allow to lapse or expire any Intellectual Property Rights, except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case Ordinary Course of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations Business with respect to Intellectual Property Rights that are not material to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees business of the Company or any of its Subsidiaries;
(pxix) become party to, establish, adopt, amend, commence participation in or terminate any collective bargaining agreement or other agreement with a labor union, labor organization, works council or similar organization;
(xx) fail to maintain policies and procedures designed to ensure compliance with the FCPA and Other Anti-Bribery Laws;
(xxi) fail to maintain policies and procedures designed to ensure compliance with the Export and Sanctions Regulations in each jurisdiction in which the Company and its Subsidiaries operate or are otherwise subject to jurisdiction;
(xxii) take any action or omit fail to take any action that is reasonably likely expected to result in any of the conditions to the Merger set forth in Article VII VIII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(sxxiii) agree, authorize or commit to do any of the foregoing.
Appears in 1 contract
Sources: Merger Agreement
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after (a) From the date hereof and prior until the Closing Date, Seller shall (or, with respect to the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this AgreementAssets that are not Seller Operated Assets, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use its commercially reasonable efforts to preserve intact its business organization and relationships with third parties and keep available cause the services operator of its present officers and employees. Without limiting the generality such Assets in which it owns working interests to):
(i) not abandon any Well on any Lease capable of commercial production, or release or abandon all or any part of the foregoingAssets capable of commercial production, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) release or (C) as set forth in Section 6.1 abandon all or any portion of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instrumentsLeases without Purchaser’s written consent;
(bii) merge not cause the Assets to be developed, maintained or consolidate operated in a manner materially inconsistent with prior operation;
(iii) not commence or agree to participate in any operation on the Company Seller Operated Assets anticipated to cost in excess of one hundred thousand and NO/100 Dollars ($100,000.00) per operation, or any operation on the Assets not operated by Seller anticipated to cost in excess of its Subsidiaries one hundred thousand and NO/100 Dollars ($100,000) per operation, net to Seller’s interest, without Purchaser’s written consent (except emergency operations, operations required under presently existing contractual obligations, and operations undertaken to avoid any penalty provision of any applicable agreement or order);
(iv) not create any lien, security interest or other encumbrance with any other Personrespect to the Assets (except for Permitted Encumbrances), or restructureor, reorganize or completely or partially liquidate or otherwise without Purchaser’s written consent, enter into any agreements agreement for the sale, disposition or arrangements imposing material changes encumbrance of any of the Assets, or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issuededicate, sell, pledge, encumber or dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially oil and adversely modifygas production, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or business on a contract which is terminable on not more than thirty (ii30) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without days’ notice or lapse of time or both) under, or give rise to except production sold under a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000contract listed on Exhibit A-3;
(ev) except pursuant not agree to Contracts any alterations in the contracts included in or relating to a material portion of the Assets or enter into any material new contracts relating to the Assets (other than contracts terminable on not more than thirty (30) days’ notice) without Purchaser’s written consent;
(vi) maintain in force all insurance policies covering the Assets;
(vii) maintain the Leases in full force and effect and comply with all express or implied covenants contained therein (provided that this covenant shall not be deemed to expand Seller’s title warranties beyond those expressly contained in this Agreement);
(viii) furnish Purchaser with copies of all AFEs in excess of one hundred thousand dollars ($100,000.00), net to Seller’s interest, received or issued by Seller prior to the Closing;
(ix) not liquidate, dissolve, recapitalize or otherwise wind up its business in any respect as it relates to or affecting the Assets;
(x) not change its accounting methods, policies or practices, in each case as it relates to the Assets, except as required by applicable law;
(xi) not cancel or waive any claims or rights of material value;
(xii) not commence, settle or propose to settle any Proceedings related to the Assets;
(xiii) not take any action, or fail to take any action, which action or failure to act will or could reasonably be expected to lead to the termination or material modification of any permits necessary to operate the Assets as presently conducted;
(xiv) not agree, whether in writing or otherwise, to take or omit to take any action inconsistent with the foregoing.
(b) Notwithstanding anything to the contrary in this Agreement, from and after the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loansuntil Closing, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;Seller shall:
(i) except under credit facilities set forth provide Purchaser with access (or, where Seller is not an operator, use its commercially reasonable efforts to arrange for access) to the Assets for inspection thereof at the sole cost, risk and expense of Purchaser;
(ii) use reasonable efforts to obtain any and all necessary consents, waivers (including waiver of preferential purchase rights), permissions and approvals of third parties or governmental authorities in Section 5.1(j)(i)(D) connection with the sale and transfer of the Company Disclosure LetterAssets other than approvals of federal lease assignments to Purchaser;
(iii) cause to be filed all reports required to be filed by Seller with governmental authorities relating to the Assets;
(iv) provide prompt notice to Purchaser of any notice received by Seller of a default, incur claim, obligation or suit which affects any indebtedness for borrowed money or guarantee such indebtedness of another Personthe Assets; and
(v) promptly notify Purchaser of any event, condition, or issue or sell occurrence which results in any debt securities or warrants or other rights to acquire any debt security of the Company or any of representations and warranties made herein to be untrue.; and
(vi) carry on its Subsidiariesbusiness, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregatecourse, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms as presently conducted and substantially consistent with past practice and not use commercially reasonable efforts to exceed $250,000 of notional debt in maintain and preserve intact the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoing.organization
Appears in 1 contract
Sources: Purchase and Sale Agreement
Interim Operations. (a) CPI covenants and agrees that, after the date hereof and prior to the CPI Merger Effective Time (unless Parent shall otherwise approve in writing, which approval shall not be unreasonably withheld or delayed, and except as set forth in Section 6.1(a) of the CPI Disclosure Letter, or as otherwise contemplated by this Agreement, the Asset Purchase Agreement or the Ancillary Agreements):
(i) it shall conduct its business as a holding company for Company Shares in the ordinary course of business, consistent with past practice and comply in all material respects with all applicable Laws, including Environmental Laws;
(ii) it shall not (A) issue, sell, pledge, dispose of or encumber any Company Shares; (B) amend its certificate of incorporation or bylaws except pursuant to the Recapitalization Amendment; (C) split, combine or reclassify its outstanding shares of capital stock, except pursuant to the Recapitalization Amendment; or (D) repurchase, redeem or otherwise acquire any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock except pursuant to the Recapitalization Amendment;
(iii) it shall not issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any CPI Voting Debt or any material property or assets except pursuant to the Recapitalization Amendment;
(iv) it shall not incur any material liability or obligation or otherwise engage in any activity or take any action other than in furtherance of the consummation of the transactions pursuant to this Agreement in accordance with the provisions of this Agreement; provided, however, that prior to the due adoption of this Agreement by holders of the Company Shares constituting the Company Requisite Vote, CPI shall not be prohibited by this clause (iv) from providing information at the Company's request in response to a request therefor by a Person who has made an unsolicited bona fide written Acquisition Proposal pursuant to clause (B) of the proviso in Section 6.2(a) or from participating in negotiations or discussions by the Company with a Person pursuant to clause (C) of the proviso in Section 6.2(a);
(v) it shall not change in any material respect any of the accounting principles or practices used by it, except as may be required as a result of a change in GAAP; and
(vi) it shall not make any tax election without prior notice to Parent, except in the ordinary course of business; and
(vii) it shall not authorize or enter into an agreement to do any of the foregoing.
(b) The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Company Merger Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, each of the Company and its Subsidiaries which approval shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) , and except as set forth in Section 6.1 of otherwise contemplated by this Agreement, the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:Asset Purchase Agreement or the Ancillary Agreements):
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except it shall operate the business of it and its Subsidiaries (other than such portion as comprises the Business) only in the ordinary course of business, or consistent with past practice and in material compliance with all applicable Laws, and, to the extent consistent with such operation, use commercially reasonable efforts to: (A) preserve the present business organization intact; and (B) preserve any beneficial business relationships with all customers, suppliers, Government Entities, and others having business dealings with the business of it and its Subsidiaries (other than such portion as comprises the Business);
(ii) if consummation it shall maintain (A) the material assets of the transactions contemplated by this Agreement or compliance by Company and its Subsidiaries (other than the Purchased Assets) in such condition and repair consistent with past practice, and (B) insurance upon all of the material assets of the Company and its Subsidiaries (other than the Purchased Assets) and with respect to the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any conduct of the properties or assets business of any the Company or Parent or any of and its Subsidiaries under such Contract; provided(other than the Business) in full force and effect, howevercomparable in amount, scope, and coverage to that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to on the date of this Agreement;
(iii) it shall not (A) authorize, create issue, deliver, sell, pledge, dispose of or incur encumber any Lien material to the Company or capital stock owned by it in any of its Subsidiaries on any assets that are not Transferred Subsidiaries (as defined in the Asset Purchase Agreement); (B) amend its or its Subsidiaries' or certificate of incorporation or bylaws or equivalent organizational documents; (C) split, combine or reclassify (including causing the conversion of Class B Common Shares to Common Shares pursuant to Article FOURTH, Section 2(e)(1)(iii) of the Company or any certificate of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary incorporation of the Company) in excess its or its Subsidiaries' outstanding shares of $50,000 in the aggregate;
capital stock; (gD) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwiseotherwise in respect of any capital stock other than dividends from its direct or indirect wholly owned Subsidiaries and other than, in the case of the Company, regular quarterly cash dividends not in excess of $0.08 per Company Share per quarter (paid to record holders of stock on a date set consistent with respect past practice); or (E) repurchase, redeem or otherwise acquire, except, in the case of the Company in each case set forth above, in connection with the Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible into or exchangeable into or exercisable for any shares of such its capital stock;
(iv) neither it nor any of its Subsidiaries that are not Transferred Subsidiaries shall (A) issue, except authorize, deliver, grant, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of its capital stock of any class or any Company Voting Debt (other than, in accordance with cashless exercise provisions the case of rights granted prior the Company, Company Common Shares issuable pursuant to Company Options or Stock Awards outstanding on the date hereof under the Company Stock Plans;
); (iB) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money lease or guarantee such indebtedness of another Personotherwise dispose of, or issue grant or sell any debt securities option or warrants or other rights right to acquire any debt security purchase that portion of the Company or any of its SubsidiariesCompany's business that does not include the Purchased Assets, except for indebtedness for borrowed money incurred in the ordinary course of business business, consistent with past practices practice; or (iC) not to exceed $200,000 in the aggregatesell, (ii) in replacement assign, transfer, convey or otherwise dispose of existing indebtedness for borrowed money on terms substantially consistent with any material asset or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries right of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 subject any of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) assets of the Company Disclosure Letter and consistent therewith(other than the Purchased Assets) to any further material lien, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, leasecharge, license, mortgage, pledge, surrendersecurity interest or similar encumbrance (each, encumberan "Encumbrance"), divestother than (i) Permitted Encumbrances (as defined in the Asset Purchase Agreement) (ii) as reflected, cancel, abandon or allow to lapse or expire reserved or otherwise dispose of any assetsdisclosed in the Audited Pro Forma Financial Statements, product lines the Interim Pro Forma Financial Statements or businesses of the financial statements included in or incorporated by reference in the Company Reports filed prior to the date of this Agreement or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory (iii) in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets consistent with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreementpast practice;
(ov) except as required pursuant to existing writtenneither it nor any of its Subsidiaries shall terminate, binding agreements establish, adopt, enter into, make any new grants or policies awards under, amend or otherwise modify, any Compensation and Benefit Plans or arrangement that would be a Compensation and Benefit Plan if it were in effect prior on the date hereof, or pay or promise to pay, any bonus, profit-sharing or special compensation to the date Employees or Directors or make any increase in the compensation or benefits payable or to become payable to any of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Lettersuch Employees or Directors, or as otherwise hire, without the consent of Parent which consent shall not be unreasonably withheld, any employee who would be entitled to an annual base salary greater than $100,000, except (A) for changes that are required by applicable Law, (iB) grant or provide to satisfy obligations under the terms of any severance or termination payments or benefits to any director, officer or employee Compensation and Benefit Plan in effect as of the Company or any of its Subsidiariesdate hereof, (iiC) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, for increases in the case of employees who compensation that are not officers, made in the ordinary course of business consistent with past practice (which shall include normal periodic performance reviews and related compensation and benefit increases), which increases their effective dates for corporate officers are set forth in Section 6.1(b)(v) of the Company Disclosure Letter and (iiiD) establishfor employment arrangements for or grants of awards, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding other than equity-based awards, to newly hired employees (ivhired in accordance with this paragraph) take in the ordinary course of business consistent with past practice; provided, however, that nothing in this clause (v) shall permit any action to accelerate that would otherwise be prohibited by clause (iv)(A) above;
(vi) except in the vesting ordinary course of business consistent with past practice or paymentin connection with the Assets Purchase, neither it nor any of its Subsidiaries shall enter into or terminate any Company Contract, or fund make any change in any of its Company Contracts;
(vii) neither it nor any of its Subsidiaries shall make any tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated without prior notice to Parent, except in the ordinary and usual course of business or in connection with the Assets Purchase;
(viii) neither it nor any of its Subsidiaries shall (A) acquire (by merger, consolidation or acquisition of stock or assets) or sell (by merger, consolidation or sale of stock or assets) any corporation, partnership or other business organization or division thereof or any assets in each case, which are material to the Company and its Subsidiaries taken as a whole other than in connection with the Assets Purchase, (B) incur any long-term indebtedness for money borrowed or assume, guarantee or endorse, or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans, advances or capital contributions to, or investments in any other way secure person (other than a Subsidiary or Transferred Subsidiary of the paymentCompany or in connection with the Assets Purchase), in each case, other than (x)in the ordinary course of compensation business consistent with past practice or benefits under (y) any Benefit Planletter of credit entered into in the ordinary course of business consistent with past practice, (C) authorize any new capital expenditures which are, in the aggregate, in excess of $500,000 other than unforeseen capital expenditures that may be necessary to operate the business consistent with past practice or (D) authorize any new commitments for taurolidine spending which are, in the aggregate, in excess of $500,000 (it being understood that commitments made prior to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations date hereof with respect to pre-clinical work or clinical studies are not covered by these limitations);
(ix) neither it nor any Benefit Plan of its Subsidiaries shall change in any material respect any of the accounting principles or to change the manner in which contributions to such plans are made or the basis on which such contributions are determinedpractices used by it, except as may be required by as a result of a change in SEC guidelines or GAAP; ;
(x) neither it nor any of its Subsidiaries shall pay, discharge or satisfy any liabilities or Obligations, other than any payment, discharge or satisfaction (A) in the ordinary course of business consistent with past practice, (B) in accordance with the terms of any such liabilities or Obligations, (C) which does not involve an amount in excess of $100,000, or (viD) forgive as set forth in Section 6.1(b)(x) of the Company Disclosure Letter;
(xi) neither it nor any loans of its Subsidiaries shall settle or compromise any litigation pending against the Company (whether or not commenced prior to directorsthe date of this Agreement) other than settlements or compromises of litigation or where the amount paid (less the amount reserved for such matters by the Company or covered by insurance) in settlement or compromise in each case does not exceed $100,000 or $500,000 in the aggregate;
(xii) neither it nor any of its Subsidiaries shall effectuate a "plant closing" or "mass layoff," as those terms are defined in WARN or any state or local law, officers affecting in whole or employees in part any site of employment, facility, operating unit or employee;
(xiii) neither it nor any of its Subsidiaries shall adopt a plan of complete or partial liquidation, dissolution, consolidation, restructuring, recapitalization, merger or other reorganization of the Company or any of its SubsidiariesSubsidiaries (other than the Mergers and the Assets Purchase);
(pxiv) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit neither it nor any of its Subsidiaries to take shall involuntarily separate any action that is reasonably likely to prevent Employee from employment with the consummation of the MergerCompany without due cause; orand
(sxv) agree, neither it nor any of its Subsidiaries shall authorize or commit enter into an agreement to do any of the foregoing.
(c) The provisions of this Section 6.1 notwithstanding, nothing in this Agreement shall be construed or interpreted to prevent the Company or any Subsidiary from (i) entering into the Asset Purchase Agreement and the Ancillary Agreements or complying with any of the terms thereof (ii) subject to Section 8.8, of the Asset Purchase Agreement making, accepting or settling intercompany advances to, from or with one another; (iii) subject to Section 6.21(b), causing any Subsidiary to pay or distribute to the Company all cash, money market instruments, bank deposits, certificates of deposit, other cash equivalents, marketable securities and other investment securities then owned or held by such Subsidiary; (iv) subject to Section 6.21(b), causing any Subsidiary which owns or holds any Purchased Assets to transfer such assets to the Company or its nominee prior to the Closing by means of a dividend, distribution in kind or other transfer without consideration; or (v) subject to Section 6.21(b), engaging in any other transaction incident to the normal cash management procedures of the Company and its Subsidiaries, including, without limitation, short-term investments in bank deposits, money market instruments, time deposits, certificates of deposit and bankers' acceptances and borrowings for working capital purposes and purposes of providing additional funds to Subsidiaries made, in each case, in the ordinary course of business, consistent with past practice; provided, however, that neither the Company nor any of its Subsidiaries may take any action pursuant to this Section 6.1(c) to the extent such action would have a material adverse effect on the Tax liability of the Company or any of its Subsidiaries without the prior written consent of Parent, which shall not be unreasonably withheld or delayed.
Appears in 1 contract
Sources: Agreement and Plan of Merger (Carter Wallace Inc /De/)
Interim Operations. The Company covenants and Seller agrees as to itself and its Subsidiaries that, that after the date hereof Execution Date and prior to the Effective Time Closing Date (unless Parent Buyer shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this AgreementLaw, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it Seller shall use its commercially reasonable efforts to preserve intact (i) maintain in effect all foreign, federal, state and local licenses, permits, consents, franchises, approvals and authorizations; and (ii) continue to provide customer support and service to its business organization and relationships with third parties and keep available customers in the services of its present officers and employeesOrdinary Course. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement Execution Date until the Effective TimeClosing, except (A) as otherwise expressly permitted contemplated by this Agreement, ; (B) as Parent Buyer may approve consent in writing (such approval which consent shall not to be unreasonably withheld or delayed; provided that Buyer shall be required to respond to Seller within two (2) Business Days after receipt of written notice requesting approval from Seller with respect to any such action, and if Buyer does not respond within such time period, such lack of response shall be deemed to constitute written approval of Buyer with respect to any such action); (C) as is required by applicable Law or Governmental Authorities; or (CD) as set forth in Section 6.1 of the Company Disclosure LetterSchedule 7.5, the Company Seller will not and will not permit its Subsidiaries tonot:
(a) adopt or propose any amendment or change in its articles certificate of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesliquidate;
(c) sell, lease or otherwise transfer, or create or incur any Encumbrance other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance ofa Permitted Encumbrance on, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesAcquired Assets;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result modify in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon respect any of the properties Transferred Contracts or assets of waive any Company or Parent or failure to comply with any provision thereunder by any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000other parties thereto;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create enter into any agreement or incur any Lien arrangement that is material to the Company Acquired Assets, or any of its Subsidiaries on any assets of the Company that materially increases Seller’s actual or any of its Subsidiaries having a value in excess of $50,000contingent liabilities and obligations beyond cash available to satisfy them;
(f) make any loans, advances or capital contributions fail to or investments in any Person (other than maintain the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 Tangible Assets in the aggregateOrdinary Course;
(g) declaretake (or omit to take) any action that adversely affects, set asideor could reasonably be expected to adversely affect, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any rights of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary Seller to the Company Seller Intellectual Property Assets, or abandon or permit to lapse any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect rights of Seller to the voting of such capital stockSeller Intellectual Property Assets;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of itssettle, or its Subsidiariesoffer or propose to settle (i) any litigation, capital stock investigation, arbitration, proceeding or securities convertible other claim involving or exchangeable into against Seller or exercisable for (ii) any shares of such capital stocklitigation, except in accordance with cashless exercise provisions of rights granted prior arbitration, proceeding or dispute that relates to the date hereof under transactions contemplated hereby or by the Company Stock PlansOther Agreements, in either case with any result which adversely affects the Business or Acquired Assets;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money sell or guarantee such indebtedness of another Person, or issue or offer to sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business Products on terms that are not consistent with past practices (i) not Seller’s Ordinary Course or at any price that is less than such Product’s list price, subject to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially discounts consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregateOrdinary Course;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting that would make any representation or paymentwarranty of Seller hereunder, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely necessary to result prevent any representation or warranty of Seller hereunder from being, inaccurate in any respect at, or as of any time before, the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the MergerClosing Date; or
(sk) agree, authorize agree or commit to do any of the foregoing.
Appears in 1 contract
Interim Operations. The Between the Signing Date and the Closing Date or the earlier termination of this Agreement in accordance with Article IX, except as set forth on Schedule 7.1 or as contemplated by this Agreement, unless Buyer has previously consented (which consent will not be unreasonably withheld, conditioned, or delayed) or as required by applicable Law, each Acquired Company covenants and agrees as Subsidiary will conduct their operations in the Ordinary Course of Business and will use commercially reasonable efforts to itself maintain and its Subsidiaries preserve intact their current business organization and operations and to preserve the rights, goodwill, and present relationships with employees, suppliers, customers, landlords, insurance carriers, lenders and other Persons having business dealings with such Acquired Company or Subsidiary (it being understood that, after for the date hereof and avoidance of doubt, prior to the Effective Time Closing, (a) the Acquired Companies and the Subsidiaries may use all available cash to repay any indebtedness and (b) Seller and/or the Acquired Companies and Subsidiaries may assume, settle, cancel, pay, or otherwise terminate any or all of the Acquired Companies’ or Subsidiaries’ obligations, receivables, payables, loans or other intercompany accounts between Seller and any Acquired Company or Subsidiary). Without limiting the foregoing, between the Signing Date and the Closing Date or the earlier termination of this Agreement in accordance with Article IX, except as set forth on Schedule 7.1 or as contemplated by this Agreement, unless Parent Buyer has previously consented (which consent will not be unreasonably withheld, conditioned or delayed) or as required by applicable Law, no Acquired Company nor any Subsidiary shall otherwise approve do any of the following:
(a) incur any indebtedness for borrowed money or issue any long-term debt securities or assume, guarantee or endorse such obligations of any other Person, except for indebtedness incurred in writingthe Ordinary Course of Business under existing credit facilities on the Signing Date;
(b) and except in the Ordinary Course of Business, (i) acquire, assign, license, lease, or dispose of, any material property or assets, (ii) mortgage or encumber any material property or assets other than Permitted Liens, or (iii) cancel any debts owed to or claims held by any Acquired Company or Subsidiary;
(c) commit, for the period following the Closing, to any new capital expenditures (other than capital expenditures not in excess of One Hundred Thousand Dollars ($100,000) in the aggregate);
(d) other than in the Ordinary Course of Business or a termination by another contract party under the terms of a Material Contract, enter into, amend, modify, terminate, or waive any material right under any Material Contract;
(e) enter into, adopt, amend or terminate any agreement relating to the compensation or severance of any employee of any Acquired Company or Subsidiary other than in the Ordinary Course of Business, except as required by applicable Laws Law, any existing agreements, or the terms of any Employee Plan;
(f) amend or terminate any Employee Plan or enter into or adopt any arrangement that would be an Employee Plan if in effect on the Signing Date, except as required by Law, any existing agreement, or the terms of any Employee Plan;
(g) grant any bonuses, whether monetary or otherwise, or increase any wages, salary, severance, pension or other compensation or benefits in respect of any current or former employees, officers, directors, independent contractors or consultants, other than in the Ordinary Course of Business or as provided for in this Agreementany existing agreements or Employee Plan or required by applicable Law, each or accelerate the vesting or payment of the Company and its Subsidiaries shall conduct its business any compensation or benefit for any current or former employee, officer, director, consultant or independent contractor, other than in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services Ordinary Course of its present officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except (A) Business or as otherwise expressly permitted provided for in any existing agreements or required by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instrumentsLaw;
(bh) merge undertake any “mass layoff”, “mass termination”, “permanent discontinuance”, “collective dismissal”, or consolidate the Company “plant closing” (as defined by WARN or any other applicable Law, including the ESA, the ALS, and the Mexican Federal Labor Law) at any “single site of its Subsidiaries with any other Person, employment” (as defined by WARN) or restructure, reorganize “establishment” (as defined by the ESA) or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses“employer” (as defined by the ALS) where current employees are located;
(ci) other than in accordance with benefits outstanding prior make any material change to the date hereof under the Company Stock PlansAcquired Companies’ accounting (including tax accounting) methods, issueprinciples or practices, sell, pledge, dispose of, grant, transfer, encumber, except as may be required by GAAP or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitieschanges in Law;
(dj) materially and adversely modify, terminate settle or renew compromise any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except pending or threatened Action other than any monetary settlement entered in the ordinary course Ordinary Course of businessBusiness consisting of an amount less than $25,000, or (ii) if consummation claim that will involve payments of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value consideration in excess of $50,000100,000, (iii) claim that will involve consideration other than monetary damages, or (iv) claim that involves any Significant Customer or Significant Supplier where the nature of such claim, or settlement or compromise thereof, is inconsistent with past practice in the Ordinary Course of Business;
(fk) make any loans, advances amendment to any Acquired Company’s or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregateSubsidiary’s Organizational Documents;
(gl) issue or sell any equity interests or other rights to purchase any equity interests of the Acquired Companies or Subsidiaries; recapitalize, reclassify, split, combine or subdivide the equity interests of the Acquired Companies or Subsidiaries; declare, set aside, make aside or pay any dividend or other distribution, distribution payable in cashstock or other property; redeem, stock, property purchase or otherwise, with respect to otherwise acquire directly or indirectly any of its capital stock or the capital stock equity interests of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Acquired Company or to any other direct or indirect wholly-owned Subsidiary) ; or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, the equity interests of any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Acquired Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amountSubsidiary;
(m) makeadopt any plan of merger, adopt consolidation, reorganization, liquidation or change dissolution or filing of a petition in bankruptcy under any material Tax election provisions of any bankruptcy Law or Tax accounting method, or fail consent to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Datefiling of any bankruptcy petition against it under any similar Law;
(n) transfermake any loan to (or forgive any loan to), sellor enter into any other transaction with, leaseany current or former directors, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon officers or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreementemployees;
(o) except as required pursuant to enter into a new line of business or abandon or discontinue any existing writtenline of business, binding agreements or policies institute any material change in effect prior to the date of this Agreement and set forth in Section 5.1(h) conduct of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiariesbusiness;
(p) take make or change any action Tax election, settle or omit compromise any claim, notice, audit report or assessment in respect of Taxes; enter into any Tax allocation agreement, Tax sharing agreement, Tax indemnity agreement, pre-filing agreement, advance pricing agreement, cost sharing agreement or closing agreement relating to take any action that is reasonably likely Tax; file any income tax return; amend any material Tax Return; surrender or forfeit any right to result in claim a material Tax refund; or consent to any extension or waiver of the conditions statute of limitations period applicable to the Merger set forth in Article VII not being satisfied;any Tax claim or assessment; or
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries agree to take any action that is reasonably likely to prevent the consummation of the Merger; or
actions described in clauses (sa) agreethrough (p) above. Nothing contained in this Section 7.1 or elsewhere in this Agreement shall preclude the Acquired Companies, authorize in their sole discretion, from making cash distributions to Seller, provided that any such distribution does not result in any Taxes owing by Buyer or commit to do any of Acquired Company or Subsidiary following the Closing Date. Notwithstanding the foregoing, Electrogroup shall not be permitted to make any cash distribution or dividend other than the Electrogroup Dividend.
Appears in 1 contract
Sources: Stock Purchase Agreement (Pioneer Power Solutions, Inc.)
Interim Operations. The Company With respect to operations of the Assets during the period between the execution of this Agreement and the Closing Date (the “Interim Period”), Seller covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior that it shall (i) to the Effective Time (unless Parent shall otherwise approve in writing) extent within the control of Seller, cause the Assets to be maintained and except as required by applicable Laws or as provided for in this Agreement, each of the Company and its Subsidiaries shall conduct its business operated in the ordinary course course, consistent with past practice and it shall use reasonable efforts practices; (ii) provide notice of any AFE copies received by Seller for any operations involving Seller commitments of less than $100,000, net to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Time, except Seller’s interest; (iii) obtain Buyer’s prior written approval prior to consenting to (A) as otherwise expressly permitted by this Agreementany workover designed to change the existing completion interval with respect to any Well, and (B) as Parent may approve in writing any future expenditures and proposed contracts and agreements relating to the Assets that involve individual commitments of $100,000 or more, net to Seller’s interest; (such iv) obtain Buyer’s prior written approval not prior to, by action or inaction, going non-consent on any proposal made pursuant to be unreasonably withheld any joint operating or delayedsimilar agreement affecting the Assets; and (v) or (C) as set forth in Section 6.1 of the Company Disclosure Letterobtain Buyer’s written approval before voting under any operating, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Personunit, joint venture, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contractsimilar agreement; provided, however, that Buyer will not unreasonably withhold or delay a determination on any such approval under (iii), (iv) or (v) above. Furthermore, during the foregoing shall not prohibit entering intoInterim Period, modifying Seller will not, without the prior written consent of Buyer, (a) enter into any agreement or renewing arrangement transferring, selling, or encumbering any of the Contracts Assets, other than sales of current production or products in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred and dispositions in the ordinary course of business consistent of any item of personal property or equipment having a value of less than $50,000 and that is promptly replaced with past practices similar property or equipment of equal or greater value and utility; (ib) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize grant any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation Preferential Right or other proceedings before a Governmental Entity for an amount in excess of $200,000 or similar right to purchase any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAPAssets; or (vic) forgive enter into, terminate or amend any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions Material Contract relating to the Merger set forth in Article VII Assets, including entering into any new production sales contract extending beyond the Closing Date and not being satisfied;
terminable on sixty (q60) take any action that would violate the CIA;
days’ notice or less; or (rd) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoing. Notwithstanding the forgoing, in the face of serious risk to life, property, or the environment, Seller may take, or consent to, such action as a prudent operator, or non-operator, as the case may be, would take without obtaining Buyer’s prior consent. Seller shall notify Buyer of any emergency action taken, and to the extent reasonably practicable, obtain Buyer’s prior approval of such actions. However, except for emergency action that must be taken in the face of serious risk to life, property, or the environment, Seller has no obligation to undertake any actions with respect to the Assets that are not required in the course of the normal operation of the Assets. To the extent that Seller is not the operator of any portion of the Assets, the obligations of Seller in Section 12.1 concerning operations or activities that normally, or pursuant to existing contracts are carried out or performed by the operator, shall be construed to require only that Seller use all reasonable efforts (without being obligated to incur any expense or institute any cause of action) to cause the operator of such portion of the Assets to take such actions or render such performance within the constraints of the applicable operating or other agreements.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Tetra Technologies Inc)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after (a) During the period from the date hereof of this Agreement and prior to continuing until the earlier of the termination of this Agreement or the Effective Time (unless Parent shall otherwise approve in writing) and of the Merger, except as required by applicable Laws or as provided for set forth in this Agreementthe Disclosure Schedule, each of the Company and its Subsidiaries shall unless Active has consented in writing thereto, TransLink:
(i) Shall conduct its business in the operations according to its usual, regular and ordinary course in substantially the same manner as heretofore conducted;
(ii) To the extent consistent with past practice and it its business, shall use commercially reasonable efforts to preserve intact its business organization and relationships with third parties and goodwill, keep available the services of its present officers officers, employees and employees. Without limiting contractors and maintain satisfactory relationships with those persons having business relationships with it;
(iii) Shall promptly notify Active of any Material Adverse Effect, any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the generality same may be contemplated), or the material breach of the foregoing, from the date of this Agreement until the Effective Time, except any representation or warranty contained herein;
(iv) Shall not (A) issue any shares of its capital stock, effect any stock split or otherwise change its capitalization as otherwise expressly permitted by this Agreement, it existed on the date hereof; (B) as Parent may approve in writing (such approval not to be unreasonably withheld grant, confer or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letteraward any option, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws warrant, conversion right or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions right not existing on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such its capital stock; (C) increase any compensation, make payment of cash bonuses to, or enter into or amend any employment agreement with any of its present or future officers, directors, employees or contractors except for normal increases consistent with past practice; (D) grant any severance or termination package to any employee, contractor or consultant; or (E) adopt any new employee benefit plan (including any stock option, stock benefit or such convertible stock purchase plan) or exchangeable securitiesamend any existing employee benefit plan in any material respect, except to the extent required by applicable law or under the terms of this Agreement;
(dv) materially and adversely modifyShall not enter into any agreement or transaction, terminate or renew agree to enter into any Material Contract agreement or transaction, outside the ordinary course of business, including, without limitation, any Contract that would be transaction involving a Material Contract if in existence on merger, consolidation, joint venture, license agreement partial or complete liquidation or dissolution, reorganization, recapitalization, restructuring or a purchase, sale, lease or other disposition of a material portion of assets or capital stock;
(vi) With the date hereof, (i) except exception of licenses entered into in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying transfer to any person or renewing the Contracts in the ordinary course of business entity any rights to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000Intellectual Property Rights;
(evii) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory Except in the ordinary course of business, sales with prior notice to Active, shall not violate, amend, or otherwise change the terms of obsolete assets and sales, leases, licenses or other dispositions any of assets with a fair market value not in excess of $250,000 the contracts set forth in the aggregate, Disclosure Schedules;
(viii) Shall not commence a lawsuit other than pursuant for: the routine collection of bills (other than against customers or vendors of Active and its Subsidiaries of which Active or its counsel have received notice); or for injunctive relief on the grounds that TransLink has suffered immediate and irreparable harm not compensable in money damages provided TransLink has obtained the prior written consent of Active, such consent not to Contracts in effect prior to the date be unreasonably withheld; or for breach of this Agreement;
(oix) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are Shall not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any other action which could reasonably be expected to accelerate the vesting cause a major customer or payment, supplier or fund key employee or in any other way secure the payment, of compensation or benefits under any Benefit Plan, contractor to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations terminate its relationship with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its SubsidiariesTransLink;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoing.
Appears in 1 contract
Sources: Agreement and Plan of Reorganization (Active Software Inc)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after (a) From the date hereof and of this Agreement until the applicable Closing, except with the prior to written consent of the Effective Time Purchaser (unless Parent shall which consent may not be unreasonably withheld, delayed or conditioned), as otherwise approve in writing) and except expressly required or contemplated by this Agreement or any other Transaction Agreement, as required by applicable Laws Law or Order, or as provided for in this Agreementset forth on Schedule 5.1(a), each of the Company Acquired Companies, the Seller and its Subsidiaries shall each other member of the Seller Group shall: (i) conduct its business the Business and use and/or hold for use the Acquired Assets only in the ordinary course consistent Ordinary Course and in material compliance with past practice all applicable Laws and it shall Orders; (ii) use reasonable efforts Reasonable Efforts to (A) preserve intact the Business and the Acquired Assets, (B) maintain its business organization rights and franchises with respect to the Business and the condition of the Acquired Assets (except for ordinary wear and tear), (C) maintain the Business’ goodwill and existing relationships with third parties customers, suppliers and keep available distributors and any other Persons with whom it has a significant business relationship and retain license, permits, authorizations, franchises and certifications (including the services Applicable Governmental Authorizations), and (D) maintain its legal existence; and (iii) pay all accounts payable of its present officers the Business, collect all accounts receivable of the Business and employees. make any capital expenditures only in the Ordinary Course.
(b) Without limiting the generality of the foregoing, from the date of this Agreement until the Effective Timeapplicable Closing, except with the prior written consent of the Purchaser (which consent may not be unreasonably withheld, delayed or conditioned), as otherwise required or contemplated by this Agreement or any other Transaction Agreement, as required by applicable Law or Order, or as set forth on Schedule 5.1(b), the Acquired Companies and, only as with respect to the Business, the Seller and the members of the Seller Group, shall not take any of the following actions:
(i) alter the remuneration, benefits or terms of employment of any employee of the Business other than (A) as otherwise expressly permitted required by this AgreementLaw or Order, or (B) as Parent may approve in writing (such approval not pursuant to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 any Seller Benefit Plan of the Company Disclosure Letter, Seller or the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change Seller Group as in its articles of incorporation or bylaws or other applicable governing instrumentseffect on the date hereof;
(bii) merge other than with respect to individuals that have accepted or have been provided employment offers prior to the date hereof, hire or assign to any Acquired Company any Employees of the Business or engage any independent contractors with respect to the Business; provided that any such employees the Purchaser consents to the hiring by or assignment to an Acquired Company shall be deemed to be included on Schedule 10.8(a)(ii);
(iii) with respect to the Acquired Companies, acquire (including by merger, consolidation or acquisition of stock or assets) any entity, business or material portion of the assets of any Person;
(iv) with respect to the Acquired Companies, adopt a plan to, in whole or part, liquidate, dissolve, merge, consolidate or recapitalize the Company Acquired Companies;
(v) other than as permitted pursuant to subsection (vi) below, sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose of any Acquired Assets or any interest therein, except for: (A) sales of its Subsidiaries Inventory in the Ordinary Course or other immaterial sales or dispositions; or (B) products and services sold or assets otherwise disposed of in the Ordinary Course;
(vi) license, transfer, assign, or subject to any Encumbrance any material Intellectual Property Asset other than Permitted Encumbrances, except for non-exclusive licenses to Intellectual Property granted in the Ordinary Course; or take any action that would reasonably be likely to result in the loss, lapse, abandonment, invalidity or unenforceability of any such material Intellectual Property;
(vii) with respect to the Acquired Companies, incur any Indebtedness for borrowed money for which the Purchaser or the Acquired Companies would be responsible for repaying after the Initial Closing Date, or assume, guarantee or endorse such obligations of any other Person, or restructurepermit any of the Acquired Assets to become subject to any Encumbrance, reorganize other than Permitted Encumbrances;
(viii) waive, release or completely assign any material rights or partially liquidate Claims of the Acquired Companies, or to the extent otherwise constituting, relating to or arising from the Acquired Assets or Assumed Liabilities;
(ix) settle or compromise, or agree to the entry of any Order in respect of, any Claim or Legal Proceeding involving any of the Acquired Assets or Assumed Liabilities or the Acquired Companies other than settlements, compromises and Orders which are immaterial or which do not impose any material limitations on the conduct or operation of the Business or include any payment obligations that would be binding on a member of the Purchaser Group or the Acquired Companies following the applicable Closing;
(x) make any new commitment for capital expenditures in excess of $500,000 or increase any previous commitment for capital expenditures by greater than $500,000;
(xi) enter into any agreements Contract (A) with respect to which an Acquired Company or arrangements imposing the Business that has any Liability or obligation involving more than $50,000, contingent or otherwise, (B) which may place any material changes limitation on the method of conducting or restrictions on its assetsscope of the Business, operations or businesses(C) which would otherwise be considered a Material Contract, in each case other than customer or vendor Contracts entered into in the Ordinary Course;
(cxii) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumberencumber or otherwise dispose of any shares of capital stock or other equity securities of the Acquired Companies, or authorize the issuancesecurities convertible into or exchangeable for, saleor options, pledgewarrants, dispositioncalls, grant, transfer, lease, license, guarantee commitments or encumbrance ofrights of any kind to acquire, any shares of capital stock or other equity securities of the Company Acquired Companies or any its Subsidiariesstock appreciation rights, or securities convertible or exchangeable into or exercisable for any shares of such capital restricted stock units, stock-based performance units, or any options, warrants “phantom” stock awards or other rights that are linked to the value of any kind to acquire any shares of such capital the common stock or such convertible the value of the Acquired Companies or exchangeable securitiesany part thereof;
(dxiii) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions stock of rights granted prior to the date hereof under the Company Stock PlansAcquired Companies;
(ixiv) except under credit facilities set forth in Section 5.1(j)(i)(D) make any amendment to any of the Company Disclosure LetterAcquired Companies’ respective certificates of incorporation, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company operating agreements or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice other organizational and not to exceed $250,000 of notional debt in the aggregategovernance documents;
(jxv) except as set forth change its method of management or operations in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month periodmaterial respect;
(kxvi) modify (including any extension greater than two (2) years) or amend in any material respect, or cancel or terminate, any Material Contact, any other existing Contract material to an Acquired Company or the Business, or any Seller Benefit Plan;
(xvii) make any changes with respect to material change in its accounting policies practices or procedures, except as required to comply with, or to comply with changes in, GAAP;
(lxviii) settle (A) file or make any litigation change to any material Tax election relating solely to an Acquired Company on a stand-alone basis, change any annual Tax accounting period relating solely to an Acquired Company on a stand-alone basis, or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any method of Tax accounting relating solely to an Acquired Company on a stand-alone basis (except, in each case, as required by applicable Law or to conform to changes in applicable accounting rules), (B) file or amend any income or other material Tax election or Return of an Acquired Company on a stand-alone basis in a manner inconsistent with prior practice, unless such Tax accounting methodReturn has been made available to the Purchaser for review within a reasonable period prior to the due date for filing and the Seller has considered in good faith any comments thereto provided promptly by the Purchaser after delivery of such Tax Return to the Purchaser, or fail (C) enter into any closing agreement, settle any Tax claim, audit or assessment or surrender any right to timely (taking into account all applicable extensions) file all claim Tax Returns required refund, offset or other reduction in Tax liability, in each case only with respect to a Tax Return filed or to be filed, and pay all Taxes required to be paid, filed by or on or before the Closing Datebehalf of an Acquired Company on a stand-alone basis;
(nxix) transfermodify in any material respect the websites or Business-related content therein, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses hosted at the internet domain names set forth on Schedule 3.8(b)(ii) of the Seller Disclosure Schedule (or transferred to an Acquired Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory after the date hereof in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets accordance with a fair market value not in excess of $250,000 in the aggregateSection 5.11(g)), other than pursuant to Contracts in effect prior to the date of this AgreementOrdinary Course;
(oxx) except as required pursuant to existing writtenchange customer pricing or offer any rebates, binding agreements discounts or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letterpromotions, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, than in the case of employees who are not officers, in the ordinary course of business consistent with past practice , Ordinary Course;
(iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (ivxxi) take any other action which would reasonably be expected to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Mergerhave a Material Adverse Effect; or
(sxxii) agreeauthorize, authorize commit or commit agree to do any of the foregoing.
(c) Notwithstanding anything to the contrary in Sections 5.1(a) and (b) above, prior to the Initial Closing, the Acquired Companies are permitted (i) to transfer, assign, discharge or otherwise settle all intercompany accounts with members of the Seller Group and their Affiliates, (ii) to distribute the net cash held by the Acquired Companies as a dividend, reduction of share capital or any other form of return of funds to their respective shareholders, (iii) to contribute cash or property to the share capital of an Acquired Company or in exchange for additional shares of stock of an Acquired Company, (iv) to incur intercompany debt in connection with the settlement of intercompany accounts, and (v) to otherwise engage in intercompany transactions involving the Acquired Companies and members of the Seller Group and their Affiliates to facilitate the matters contemplated by Section 5.3.
Appears in 1 contract
Interim Operations. (a) The Company covenants and agrees as to itself and its Subsidiaries that, after Parties agree during the period commencing on the date hereof and prior to of this Agreement through the Effective Time Closing Date or termination of the Agreement under Article VIII (unless Parent shall otherwise approve in writing) and except as required expressly contemplated by applicable Laws or as provided for in this Agreement, each of including any Exhibits and Schedules hereto, or to the Company extent that the Parties shall otherwise agree in writing), Stonepath and its Subsidiaries shall conduct its business Seller will cause the Company:
(1) To carry on the Business in the ordinary course consistent with past practice Ordinary Course of Business and it Seller and Stonepath shall use all commercially reasonable efforts to preserve intact its present business organization and relationships with third parties and organization, keep available the services of its present officers and employees. Without limiting the generality of the foregoingemployees and preserve its relationships with customers, from the date of this Agreement until the Effective Time, except suppliers and others having business dealings with it.
(A2) as otherwise expressly permitted by this Agreement, (B) as Parent may approve in writing (such approval not Not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt purchase or propose redeem any change in shares of its articles of incorporation or bylaws or other applicable governing instruments;
capital stock; (b) merge split, combine or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to reclassify any of its capital stock or issue, authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock; (c) redeem, repurchase or otherwise acquire any shares of its capital stock; or (d) otherwise change its capitalization.
(3) Except as contemplated by this Agreement, not to sell, issue, pledge, authorize or propose the sale or issuance of, pledge or purchase or propose the purchase of, any shares of its capital stock of its Subsidiaries (except for dividends paid by any direct class or indirect wholly-owned Subsidiary securities convertible into, or rights, warrants or options to the Company acquire, any such shares or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;convertible securities.
(h4) other than as required by Section 5.1(r)Not to amend its amended and restated articles of incorporation or its amended and restated bylaws.
(5) Not to sell, reclassifylease, splitpledge, combine, subdivide or redeem, purchase encumber or otherwise acquiredispose of or agree to sell, directly lease, pledge, encumber or indirectlyotherwise dispose of, any of its, its assets that are material to the Company's Business or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, other assets except in accordance with cashless exercise provisions the Ordinary Course of rights granted prior Business and in no event amounting in the aggregate to the date hereof under the Company Stock Plans;more than $50,000.
(i6) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, Not to incur any indebtedness for borrowed money or guarantee any such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or guarantee any debt securities of its Subsidiariesothers other than in the Ordinary Course of Business and in no event amounting in the aggregate to more than $25,000, except for indebtedness for borrowed money incurred in to the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;Laurus Master Fund Ltd.
(j7) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, Not to make or authorize any capital expenditure expenditures in excess of $200,000 25,000 in the aggregate during any 12 month period;aggregate.
(k8) Not to accelerate the collection of its accounts receivable or delay the payment of its accounts payable or other liabilities, in each case arising out of the operation of the Business in a manner which would be inconsistent with past practice.
(9) Not to adopt or amend in any material respect any collective bargaining agreement or Employee Benefit Plan.
(10) Except for (a) payment of bonuses (i) described in Stonepath's Schedules; (ii) included in the Financial Statements; or (iii) accrued for the months since the last Financial Statements, and (b) wage increases or raises to non-officer or director employees, not to grant to any employees any increase in compensation or in severance or termination pay (other than pursuant to the agreements listed in Section 3.3 of Stonepath's Schedules), enter into any employment agreement with any employee, or grant, pay or accrue to an employee, any bonus or incentive compensation.
(11) Not to acquire (by merger, consolidation or acquisition of stock or assets or otherwise) any corporation, partnership or other business organization or subdivision thereof, or make any changes with respect investment by either purchase of stock or securities, contributions to accounting policies or procedurescapital, property transfer or, except as required to comply within the Ordinary Course of Business, purchase of any property or to comply with changes inassets, GAAP;of any other individual or entity.
(l12) settle Not to make any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Material Tax election or settle or compromise any Material Tax accounting methodliability.
(13) Not to waive, release, grant or transfer any rights of material value or modify or change in any Material respect any Material Contract other than in the Ordinary Course of Business.
(14) Not to take any action, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filedtake any action, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory that is not in the ordinary course Ordinary Course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action Business that is reasonably likely to result in any of the conditions to the Merger representations and warranties of Stonepath, Seller, and Company set forth in Article VII not being satisfied;this Agreement becoming untrue in any Material respect.
(q15) take any action that would violate To maintain in full force and effect all insurance coverages for its properties and assets substantially comparable to coverages existing on the CIA;date hereof.
(r16) knowingly take Not to enter into, or permit modify, any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; orcontract with a Related Person.
(s17) agreeTo observe corporate governance procedures between it and ▇▇▇▇▇ ▇▇▇▇▇ (who oversees the Company and is also an investor and President of Purchaser), authorize or commit that may be necessary to do avoid any conflict of the foregoinginterest arising from this Agreement.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after Between the date hereof and prior to the Effective Time (unless Parent shall otherwise approve Closing Date or the earlier termination of this Agreement in writing) and accordance with ARTICLE X, except as (a) may be required by applicable Laws Law, (b) (b) may be consented to in writing by Buyer, (c) may be expressly required, contemplated or as provided for in permitted pursuant to this Agreement, or (d) set forth on Schedule 7.1(d), each Seller shall use its reasonable best efforts to conduct the business of the Company and its Subsidiaries shall conduct its business such Seller in the ordinary course Ordinary Course of Business, and to the extent consistent with past practice and it therewith, such Seller shall use reasonable its best efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employeesin all material respects. Without limiting the generality of the foregoing, from the date of this Agreement hereof until the Effective Timeclosing Date, except Seller shall:
(i) comply in all material respects with all Laws applicable to the conduct of the Business or the ownership and use of the Purchased Assets;
(ii) not (A) as otherwise expressly permitted by this Agreementacquire, or dispose of, any Purchased Assets, or (B) as Parent may approve in writing (such approval not to be unreasonably withheld mortgage or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose encumber any change in its articles of incorporation or bylaws or Purchased Assets other applicable governing instrumentsthan Permitted Liens;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(ciii) other than in accordance with benefits outstanding prior to the date hereof Ordinary Course of Business or a termination by another contract party under the Company Stock Plansterms of a Purchased Contract, issuenot enter into, sellamend, pledge, dispose of, grant, transfer, encumber, modify or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, terminate any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securitiesPurchased Contract;
(div) materially and adversely modify, terminate not enter into any settlement or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, release with respect to any material Action relating to the Purchased Assets, unless such settlement or release contemplates only the payment of its capital stock money (or the capital stock modification, termination or release of its Subsidiaries (except for dividends paid by any direct rights or indirect wholly-owned Subsidiary to obligations of any Seller) without ongoing limits on the Company ownership or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to operation of the voting of such capital stockPurchased Assets;
(hv) other than as required by not, in each case in respect of the Purchased Assets and in the event such action would cause a material increase in Buyer’s Tax liability, (A) make, revoke, or modify any material Tax election, or (B) commence any material Tax Action or settle or compromise any material Tax Action; or
(vi) not take or permit any action that would cause any of the changes, events or conditions described in clauses (i) through (viii) above to occur. Nothing contained in this Section 5.1(r)7.1 or elsewhere in this Agreement shall preclude any Seller, reclassifyin its sole discretion, splitfrom making cash distributions or from using all available cash to repay any indebtedness. Nothing contained in this Section 7.1 or elsewhere in this Agreement shall prevent any Seller from assuming, combinesettling, subdivide or redeem, purchase canceling or otherwise acquireterminating any or all of such Seller’s obligations, receivables, payables, loans or other intercompany accounts. In addition, nothing contained in this Agreement shall give Buyer, directly or indirectly, the right to control or direct the Business or operations of any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted Seller prior to the date hereof under Closing. Prior to the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure LetterClosing, incur any indebtedness for borrowed money or guarantee such indebtedness of another Personeach Seller shall exercise, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date conditions of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement complete control and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of supervision over its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoingand operations.
Appears in 1 contract
Interim Operations. The Company Seller covenants and agrees as to itself and its Subsidiaries that, after that from the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this Agreement, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from the date of this Agreement until the Effective TimeClosing Date, except (A) as otherwise expressly permitted by this Agreementprovided herein, (B) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) required by any existing Contract or (C) as set forth otherwise consented to in Section 6.1 of the Company Disclosure Letterwriting by Buyer, Seller will:
4.02.01 Not (A) operate or in any manner deal with, incur obligations with respect to, or undertake any transactions relating to, the Company will not and will not permit its Subsidiaries to:
(a) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) Subject Properties other than transactions (i) in accordance the normal usual and customary manner, (ii) of a nature and in an amount consistent with benefits outstanding prior practice, (iii) in the ordinary and regular course of business of owning and operating the Subject Properties, and (iv) subject to the date hereof under the Company Stock Plans, issue, sell, pledge, terms and conditions of this Agreement; (B) dispose of, grantencumber or relinquish any of the Subject Properties (other than relinquishments resulting from the expiration of leases that Seller has no right or option to renew); (C) waive, transfercompromise or settle any right or claim that would have a material PURCHASE AND SALE AGREEMENT, encumberPAGE 9 10 adverse effect on the ownership, operation or value of any of the Subject Properties alter the Effective Date; or (D) commit to any expenditure in excess of $10,000.00 net to the interest of Seller for capital expenditures on any property.
4.02.02 Promptly notify Buyer of any suit, lessor demand action, or authorize other proceeding before any court, arbitrator, or governmental agency and any cause of action which relates to the Subject Properties or which might result in impairment or loss of any portion of the Subject Properties or which might hinder or impede the operation of the Subject Properties.
4.02.03 Make or give all notifications, filings, consents or approvals from, to or with all governmental authorities, and will cooperate with Buyer in obtaining the issuance, sale, pledge, disposition, grant, assignment or transfer, leaseas the case may be, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its Subsidiaries, or securities convertible or exchangeable into or exercisable for any shares by each such authority of such capital stock, or any options, warrants or other rights of any kind Permits as may be necessary for Buyer to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially own and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on operate the date hereof, (i) except in Subject Properties following the ordinary course of business, or (ii) if consummation of the transactions contemplated by in this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such ContractAgreement; provided, however, provided that the foregoing Seller shall not prohibit entering into, modifying or renewing the Contracts be required to incur any expense in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;connection therewith.
(e) except pursuant to Contracts 4.02.04 Maintain in effect prior to insurance providing the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, exceptsame type coverage, in the case of employees who are not officers, same amounts with the same deductibles as the insurance maintained in effect by Seller or its affiliates on the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoingEffective Date.
Appears in 1 contract
Sources: Purchase and Sale Agreement (Cotton Valley Resources Corp)
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to From the Effective Time (unless Parent shall otherwise approve in writing) Date until the earlier of the Closing and except as required by applicable Laws or as provided for in the termination of this Agreement, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from the date of except as expressly permitted or required under this Agreement until the Effective Time, except (A) or as otherwise expressly permitted consented to by this AgreementBuyer in writing, (B) as Parent may approve in writing (such approval and to the extent not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letterprohibited by any applicable Law, the Company will not and will not permit its Subsidiaries to:
each Seller shall: (a) adopt or propose any change maintain and keep the Purchased Assets in its articles of incorporation or bylaws or other applicable governing instruments;
the same condition as they were on the Effective Date, subject to reasonable wear and tear; (b) keep in full force and effect insurance presently maintained (or insurance comparable in amounts and scope of coverage) with respect to the Purchased Assets; (c) perform in all material respects all of its obligations under the Leases, the Railroad Agreement and all of the Purchased Contracts; (d) maintain the Purchased Books and Records in the usual manner; (e) comply in all material respects with all Laws and Permits (including the Purchased Permits); (f) not create or permit to be created any Lien (other than a Permitted Lien) or Encumbrance (other than a Permitted Encumbrance) on any of the Purchased Assets; (g) not dissolve, liquidate or wind up its affairs or merge or consolidate with or into any other Person; (h) subject to Section 6.1(a), not enter into or amend, modify, extend, renegotiate or terminate any of the Company Purchased Contracts, any of the Leases or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
the Railroad Agreements; (ci) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, not sell, pledgeassign, dispose oflicense, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grantsecuritize, transfer, lease, license, guarantee sublease or encumbrance otherwise dispose of, voluntarily or involuntarily, any shares of capital stock of the Company Purchased Assets; (j) not perform, take any action or incur or permit to exist any its Subsidiariesof the acts, transactions, events or securities convertible or exchangeable into or exercisable for any shares occurrences of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract the type described in Section 4.26 that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of businessrequire disclosure under Schedule 4.26, or (ii) if consummation result in a breach of the transactions contemplated by this Agreement representations and warranties contained in Section 4.26 or compliance by the Company (iii) result in a Material Adverse Effect; (k) other than in connection with the provisions reimbursement of this Agreement will conflict withexpenses in the Ordinary Course of Business, not incur any Indebtedness, accelerate the repayment of any existing Indebtedness, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, payment with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any Indebtedness other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoing.than
Appears in 1 contract
Interim Operations. The Company covenants and Seller agrees as to itself and its Subsidiaries that, after the date hereof of this Agreement and prior to the Effective Time Closing Date (unless Parent Buyer shall otherwise approve in writing) and except as required by applicable Laws or as provided for in this AgreementApplicable Law, each of the Company and its Subsidiaries Business shall conduct its business be conducted in the ordinary and usual course consistent with past practice and it and, to the extent consistent therewith, Seller shall use its commercially reasonable efforts to (i) preserve intact its the present business organization of the Business (except as may be otherwise contemplated by the Supply Agreement), (ii) maintain in effect all foreign, federal, state and relationships with third parties local licenses, permits, consents, franchises, approvals and authorizations and (iii) keep available the services of its present the directors, officers and employeeskey employees and suppliers (except as may be otherwise contemplated by the Supply Agreement) of the Business. Without limiting the generality of the foregoingforegoing and in furtherance thereof, from the date of this Agreement until the Effective TimeClosing, except (Ai) as otherwise expressly permitted contemplated by this Agreement, (Bii) as Parent Buyer may approve in writing writing, (such approval not iii) as is required by Applicable Law or Governmental Authorities, (iv) as may be reasonably required to be unreasonably withheld or delayed) comply with the Transition Plan or (Cv) as set forth in Section 6.1 of the Company Disclosure LetterSchedule 5.6, the Company Seller will not and will not permit its Subsidiaries tonot:
(a) adopt or propose any amendment or change in its articles of incorporation association or bylaws or other applicable governing instruments;
(b) merge or consolidate the Company or any of its Subsidiaries with any other Person, or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businessesliquidate;
(c) acquire assets outside of the ordinary course of business in a manner that is inconsistent with past practice or the Transition Plan, other than acquisitions pursuant to Contracts in accordance with benefits outstanding effect as of the date of this Agreement that have been disclosed to Buyer prior to the date hereof under of this Agreement;
(d) sell, lease or otherwise transfer, or create or incur any Lien on, any Purchased Assets, including the Company Stock PlansReagents;
(e) sell, lease or otherwise transfer, or create or incur any Lien on, any items within the Inventory;
(f) except for any repurchase, cancellation or exchange by Seller of its stock or warrants or as otherwise provided in any existing option plan of Seller that has been made available to Buyer, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transferdeliver, lease, license, guarantee or encumbrance of, any shares of capital stock of the Company or any its SubsidiariesSeller, or securities convertible or exchangeable into or exercisable for any shares of such capital stock, or any options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declarecreate, set asideincur, make assume, suffer to exist or pay any dividend or other distribution, payable in cash, stock, property or otherwise, otherwise be liable with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell guarantees thereof;
(h) modify in any debt securities or warrants or other rights to acquire respect any debt security of the Company Assumed Contracts or waive any failure to comply with any provision thereunder by any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices other parties thereto;
(i) not enter into any agreement or arrangement that is material to exceed $200,000 in the aggregatePurchased Assets, (ii) in replacement including entering into, renewing, extending, amending or terminating any license agreement with respect to the Intellectual Property of existing indebtedness for borrowed money on terms substantially consistent with a third person or more beneficial than the indebtedness being replacedTransferred Intellectual Property, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice that materially increases Seller’s actual or contingent liabilities and not obligations beyond cash available to exceed $250,000 of notional debt in the aggregatesatisfy them;
(j) except as set forth in take (or omit to take) any action that adversely affects, or could reasonably be expected to adversely affect, any rights of Seller to the capital budgets set forth in Section 6.1(j) Transferred Intellectual Property, or abandon or permit to lapse any rights of Seller to the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month periodTransferred Intellectual Property;
(k) make any changes with respect to accounting policies or procedures, except as required to comply withsettle, or offer or propose to comply with changes insettle, GAAP(1) any litigation, investigation, arbitration, proceeding or other claim involving or against Seller, the Purchased Assets or the Business or (2) any litigation, arbitration, proceeding or dispute that relates to the transactions contemplated hereby or by the Related Documents;
(l) settle amend or modify the BGX Asset Purchase Agreement, or waive any litigation provision thereof, or other proceedings before a Governmental Entity for an amount in excess of $200,000 consent to or approve any obligation or liability of the Company in excess of such amountaction by BGX that is not otherwise expressly permitted thereunder, provided, however that any approval required by Buyer pursuant to this clause (l) shall not be unreasonably withheld;
(m) make, adopt take any action that would make any representation or change any material Tax election or Tax accounting methodwarranty of Seller hereunder, or fail omit to timely (taking into account all applicable extensions) file all Tax Returns required take any action necessary to be filedprevent any representation or warranty of Seller hereunder from being, and pay all Taxes required to be paidinaccurate in any respect at, on or before as of any time before, the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice , (iii) establish, adopt, amend or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vi) forgive any loans to directors, officers or employees of the Company or any of its Subsidiaries;
(p) take any action or omit to take any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of its Subsidiaries to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize resolve or commit to do any of the foregoing. As part of the Collaboration, Seller is currently in the process of transferring the Technology to certain third party suppliers in order to enable such suppliers to deliver materials directly to Buyer for use in its work relating to the Collaboration. Seller shall, in line with current plans as set forth in the Supply Agreement, complete the transfer by it to such third party suppliers of all such Technology prior to the Closing Date in a manner reasonably satisfactory to Buyer. For the purposes of this Section 5.6, “Technology” includes all technology, know-how and documentation of Seller that such third party suppliers reasonably require in order to supply Buyer with materials required for Buyer’s work relating to the Collaboration as currently conducted.
Appears in 1 contract
Interim Operations. The (a) Except (i) as described in Section 5.1(a) of the Company Disclosure Letter, (ii) as otherwise expressly required by this Agreement or any other Transaction Document (including in connection with the Private Placements), (iii) as required by applicable Law or COVID-19 Measures or (iv) as Parent shall otherwise consent to in writing (which consent shall not be unreasonably withheld, conditioned, delayed, or denied), the Company covenants and agrees as to itself and its Subsidiaries that, after during the period from the date hereof and prior to of this Agreement until the Effective Time (unless Parent shall otherwise approve Closing, or the earlier termination of this Agreement in writing) and except as required by applicable Laws or as provided for in this Agreementaccordance with its terms, each of the Company and its Subsidiaries shall conduct (A) operate its business in the ordinary course of business consistent with past practice and it shall (B) use commercially reasonable efforts to maintain and preserve intact its business organization organization, assets, properties and relationships with third parties and keep available the services of its present officers and employees. material business relations.
(b) Without limiting the generality of of, and in furtherance of, the foregoing, from the date of this Agreement until the Effective TimeClosing or the earlier termination of this Agreement in accordance with its terms, except (Av) as otherwise expressly permitted by this Agreement, (Bdescribed in the corresponding subsection of Section 5.1(b) as Parent may approve in writing (such approval not to be unreasonably withheld or delayed) or (C) as set forth in Section 6.1 of the Company Disclosure Letter, (w) as otherwise expressly required by this Agreement or any Transaction Document, (x) as required by applicable Law or COVID-19 Measures or (y) as Parent shall otherwise consent to in writing (which consent shall not be unreasonably withheld, conditioned, delayed or denied), the Company will not and will not permit its Subsidiaries to:
(ai) adopt or propose any change in its articles of incorporation or bylaws or other applicable governing instrumentsits Subsidiaries’ Organizational Documents;
(bii) (A) merge or consolidate the Company itself or any of its Subsidiaries with any other Person, except for transactions among its wholly owned Subsidiaries or restructure, reorganize (B) adopt or completely or partially liquidate or otherwise enter into any agreements a plan of complete or arrangements imposing material changes partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or restrictions on other reorganization of the Company or its assets, operations or businessesSubsidiaries;
(ciii) acquire assets outside of the ordinary course of business from any other Person with a value or purchase price in the aggregate in excess of $200,000, or acquire any business or entity (whether by merger or consolidation, by purchase of substantially all assets or equity interests or by any other manner), in each case, in any transaction or series of related transactions, other than acquisitions or other transactions pursuant to Contracts to which the Company or any of its Subsidiaries are a party that are in effect as of the date of this Agreement;
(iv) sell, lease, license or otherwise dispose of any of its material assets or properties (other than Intellectual Property), except (A) for sales, leases, licenses or other dispositions in the ordinary course of business and (B) for sales, leases, licenses or other dispositions of assets and properties with a fair market value not in excess of $150,000 in the aggregate;
(v) except pursuant to awards granted under the Company’s Stock Plan in the ordinary course of business and in accordance with benefits outstanding prior to the terms of the Stock Plan as of the date hereof under of this Agreement, or in connection with the Company Warrant Settlement or the Preferred Stock PlansConversion, issue, sell, pledge, dispose of, grant, transfer, encumber, grant or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee sale or encumbrance of, grant of any shares of capital stock or other securities of the Company or any of its Subsidiaries (other than issuances by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company), or any options, warrants, convertible securities, subscription rights or other similar rights entitling its holder to receive or acquire any shares of such capital stock or other securities of the Company or any of its Subsidiaries;
(vi) reclassify, split, combine, subdivide, redeem or repurchase, any capital stock of the Company or any its Subsidiariesoptions, warrants or securities convertible or exchangeable into or exercisable for any shares of such its capital stock, except in connection with the net exercise or settlement of awards, repurchases of unvested shares subject to early-exercised Company Options under the Company’s Stock Plan or in connection with the Company Warrant Settlement or the Preferred Stock Conversion;
(vii) declare, set aside, make or pay any optionsdividend or distribution, warrants payable in cash, stock, property or other rights otherwise, with respect to any of any kind to acquire any shares of such its capital stock or such convertible or exchangeable securitiesenter into any agreement with respect to the voting of its capital stock;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(fviii) make any loans, advances advances, guarantees or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 ), other than in the aggregateordinary course of business;
(gix) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness Indebtedness for borrowed money or guarantee any such indebtedness Indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness Indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices (i) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt 150,000 in the aggregate;
(jx) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any commit to make capital expenditure expenditures other than in an amount not in excess of $200,000 350,000, in the aggregate during any 12 month periodaggregate;
(kxi) enter into any Contract that would have been a Company Material Contract had it been entered into prior to the date of this Agreement, other than in the ordinary course of business;
(xii) amend or modify in any material respect or terminate any Company Material Contract, or waive or release any material rights, claims or benefits under any Company Material Contract, in each case, other than in the ordinary course of business;
(xiii) make any material changes with respect to its accounting policies or procedures, except as required to comply with, by changes in Law or to comply with changes in, GAAP;
(lxiv) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any assets, product lines or businesses of the Company or its Subsidiaries, including capital stock of any of its SubsidiariesProceeding, except for sales or rental of inventory in the ordinary course of business, sales business or where such settlement is covered by insurance or involves only the payment of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value monetary damages in an amount not in excess of more than $250,000 200,000 in the aggregate, other than pursuant to Contracts in effect prior to the date of this Agreement;
(oxv) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, in the ordinary course of business consistent with past practice practice, file any material amended Tax Return, make, revoke or change any material Tax election in a manner inconsistent with past practice, adopt or change any material Tax accounting method or period, enter into any agreement with a Governmental Entity with respect to material Taxes, settle or compromise any examination, audit or other action with a Governmental Entity of or relating to any material Taxes or settle or compromise any claim or assessment by a Governmental Entity in respect of material Taxes, or enter into any Tax sharing or similar agreement (excluding any commercial contract not primarily related to Taxes), in each case, to the extent such action could reasonably be expected to have any adverse and material impact on Parent;
(xvi) except in the ordinary course of business or pursuant to the terms of any Company Benefit Plan in effect as of the date of this Agreement or as required by Law, (iiiA) increase the annual salary or consulting fees or target annual cash bonus opportunity, of any Company Employee with an annual salary or consulting fees and target annual cash bonus opportunity in excess of $200,000 as of the date of this Agreement, (B) become a party to, establish, adopt, amend amend, or terminate any material Company Benefit Plan or amend the terms of any outstanding equity-based awardsarrangement that would have been a material Company Benefit Plan had it been entered into prior to this Agreement, (ivC) take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Benefit Plan, to the extent not already provided in any such Company Benefit Plan, (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (viD) forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to directorsany Company Employee, officers (E) hire any employee or employees engage any independent contractor (who is a natural person) with annual salary or consulting fees and target annual cash bonus opportunity in excess of $200,000 or (F) terminate the employment of any employee of the Company who would be an “executive officer” (as defined in Rule 3b-7 of the Exchange Act) other than for cause;
(xvii) sell, assign, lease, exclusively license, pledge, encumber, divest, abandon, or allow to lapse any material Company Intellectual Property, other than grants of non-exclusive licenses in the ordinary course of business to customers for use of the products or services of the Company or otherwise in the ordinary course of business;
(xviii) become a party to, establish, adopt, amend, commence participation in or enter into any collective bargaining or other labor union Contract;
(xix) fail to use commercially reasonable efforts to keep current and in full force and effect, or to comply with the requirements of, or to apply for or renew, any permit, approval, authorization, consent, license, registration or certificate issued by any Governmental Entity that is material to the conduct of the business of the Company and its Subsidiaries, taken as a whole;
(xx) file any prospectus supplement or registration statement or consummate any offering of securities that requires registration under the Securities Act or that includes any actual or contingent commitment to register such securities under the Securities Act in the future;
(xxi) fail to maintain, cancel or materially change coverage under, in a manner materially detrimental to the Company or any of its Subsidiaries, any insurance policy maintained with respect to the Company and its Subsidiaries and their assets and properties;
(pxxii) take enter into any action or omit to take any action that is reasonably likely to result in any material new line of business outside of the conditions to business currently conducted by the Merger set forth in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take or permit any of Company and its Subsidiaries to take any action that is reasonably likely to prevent the consummation as of the Mergerdate of this Agreement; or
(sxxiii) agreeenter into any Contract, authorize or commit otherwise become obligated, to do do, or authorize, any of the foregoing.
Appears in 1 contract
Interim Operations. The Company covenants and agrees as to itself and its Subsidiaries that, after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writinga) and except as required by applicable Laws or as provided for in this Agreement, each of the Company and its Subsidiaries shall conduct its business in the ordinary course consistent with past practice and it shall use reasonable efforts to preserve intact its business organization and relationships with third parties and keep available the services of its present officers and employees. Without limiting the generality of the foregoing, from From the date of this Agreement until the Effective Time, except (A) as otherwise expressly permitted required by this Agreement, (B) as Parent may approve in writing (such approval not to be unreasonably withheld Law or delayed) or (C) as set forth in Section 6.1 5.2(a) of the Company Disclosure LetterSchedule, unless Parent has consented in writing thereto, the Company will not shall, and will not permit shall cause its Subsidiaries to:
(ai) adopt conduct its operations according to its ordinary course of business consistent with past practice and in compliance in all material respects with all applicable Laws; (ii) use its commercially reasonable efforts to preserve intact its business organizations and goodwill, keep available the services of its officers, employees and consultants, and maintain satisfactory relationships with those Persons having business relationships with them; (iii) upon the discovery thereof, promptly notify Parent of the existence of any breach of any representation or propose warranty contained herein (or, in the case of any change representation or warranty that makes no reference to Company Material Adverse Effect or materiality, any breach of such representation or warranty in any material respect) or the occurrence of any event that would cause any representation or warranty contained herein no longer to be true and correct (or, in the case of any representation or warranty that makes no reference to Company Material Adverse Effect or materiality, to no longer be true and correct in any material respect); (iv) promptly deliver to Parent true and correct copies of any report, statement or schedule filed with the SEC subsequent to the date of this Agreement; and (v) pay its articles of incorporation or bylaws or other applicable governing instruments;Taxes when due.
(b) merge From and after the date of this Agreement until the Effective Time, except as may be required by Law or consolidate any pre-existing contractual obligation, and except as set forth in Section 5.2(b) of the Company Disclosure Schedule, unless Parent has consented in writing thereto (which consent shall not be unreasonably withheld or delayed), the Company shall not, and shall cause its Subsidiaries not to: (i) amend its Amended Articles of Incorporation or Amended and Restated By-Laws; (ii) offer, issue, sell or pledge any shares of its capital stock or other ownership interest in the Company or its Subsidiaries, or any securities convertible into or exchangeable for any such shares or ownership interest, or any rights, warrants or options to acquire or with respect to any such shares of capital stock, ownership interest, or convertible or exchangeable securities other than pursuant to the Company’s existing employee benefits plans; (iii) effect any stock split or otherwise change its capitalization as it exists on the date hereof; (iv) grant, confer or award any option, warrant, convertible security or other right to acquire any shares of its or its Subsidiaries’ capital stock; (v) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its capital stock or other ownership interests (other than such payments by the Subsidiaries to the Company); (vi) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or capital stock of its Subsidiaries with or any other Person, securities that are convertible into or restructure, reorganize or completely or partially liquidate or otherwise enter into any agreements or arrangements imposing material changes or restrictions on its assets, operations or businesses;
(c) other than in accordance with benefits outstanding prior to the date hereof under the Company Stock Plans, issue, sell, pledge, dispose of, grant, transfer, encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance of, exchangeable for any shares of capital stock of the Company or any its Subsidiariesof, or securities convertible or exchangeable into or exercisable for any shares of such capital stockother equity interests in, or any outstanding options, warrants or other rights of any kind to acquire any shares of such capital stock or such convertible or exchangeable securities;
(d) materially and adversely modify, terminate or renew any Material Contract or any Contract that would be a Material Contract if in existence on the date hereof, (i) except in the ordinary course of business, or (ii) if consummation of the transactions contemplated by this Agreement or compliance by the Company with the provisions of this Agreement will conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result other equity interests in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any encumbrance in or upon any of the properties or assets of any Company or Parent or any of its Subsidiaries under such Contract; provided, however, that the foregoing shall not prohibit entering into, modifying or renewing the Contracts in the ordinary course of business to the extent such Contracts can be terminated after any such entering into, modification or renewal at a cost of less than $200,000;
(e) except pursuant to Contracts in effect prior to the date of this Agreement, create or incur any Lien material to the Company or any of its Subsidiaries on any assets of the Company or any of its Subsidiaries having a value in excess of $50,000;
(f) make any loans, advances or capital contributions to or investments in any Person (other than the Company or any direct or indirect wholly-owned Subsidiary of the Company) in excess of $50,000 in the aggregate;
(g) declare, set aside, make or pay any dividend or other distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock or the capital stock of its Subsidiaries (except for dividends paid by any direct or indirect wholly-owned Subsidiary to the Company or to any other direct or indirect wholly-owned Subsidiary) or enter into any agreement with respect to the voting of such capital stock;
(h) other than as required by Section 5.1(r), reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its, or its Subsidiaries, capital stock or securities convertible or exchangeable into or exercisable for any shares of such capital stock, except in accordance with cashless exercise provisions of rights granted prior to the date hereof under the Company Stock Plans;
(i) except under credit facilities set forth in Section 5.1(j)(i)(D) of the Company Disclosure Letter, incur any indebtedness for borrowed money or guarantee such indebtedness of another Person, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries, except for indebtedness for borrowed money incurred in the ordinary course of business consistent with past practices ; (ivii) not to exceed $200,000 in the aggregate, (ii) in replacement of existing indebtedness for borrowed money on terms substantially consistent with or more beneficial than the indebtedness being replaced, (iii) guarantees incurred in compliance with this Section 6.1 by the Company of indebtedness of wholly-owned Subsidiaries of the Company or (iv) interest rate swaps on customary commercial terms consistent with past practice and not to exceed $250,000 of notional debt in the aggregate;
(j) except as set forth in the capital budgets set forth in Section 6.1(j) of the Company Disclosure Letter and consistent therewith, make or authorize any capital expenditure in excess of $200,000 in the aggregate during any 12 month period;
(k) make any changes with respect to accounting policies or procedures, except as required to comply with, or to comply with changes in, GAAP;
(l) settle any litigation or other proceedings before a Governmental Entity for an amount in excess of $200,000 or any obligation or liability of the Company in excess of such amount;
(m) make, adopt or change any material Tax election or Tax accounting method, or fail to timely (taking into account all applicable extensions) file all Tax Returns required to be filed, and pay all Taxes required to be paid, on or before the Closing Date;
(n) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divesttransfer, cancel, abandon or allow to lapse or expire exchange or otherwise dispose of any of its properties or assets, product lines whether tangible or businesses of the Company or its Subsidiaries, intangible (including capital stock of any of its Subsidiaries, except for sales or rental of inventory in the ordinary course of business, sales of obsolete assets and sales, leases, licenses or other dispositions of assets with a fair market value not in excess of $250,000 in the aggregate), other than pursuant to Contracts in effect prior to the date sale or disposition of this Agreement;
(o) except as required pursuant to existing written, binding agreements or policies in effect prior to the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, or as otherwise required by applicable Law, (i) grant or provide any severance or termination payments or benefits to any director, officer or employee of the Company or any of its Subsidiaries, (ii) increase the compensation, bonus or pension, welfare, severance or other benefits of, pay any bonus to, or make any new equity awards to any director, officer or employee of the Company or any of its Subsidiaries, except, in the case of employees who are not officers, inventory in the ordinary course of business consistent with past practice or the sale, lease or other disposition of assets which individually or in the aggregate, are obsolete or not material to the Company and its Subsidiaries taken as a whole; (iiiviii) acquire by merger or consolidation with, by purchase of any equity interest of or by any other manner, any business or entity or otherwise acquire any assets, except for purchases of inventory, supplies or capital equipment in the ordinary course of business; (ix) incur or assume any long-term or short-term debt, except for working capital purposes and the purchase of capital equipment in the ordinary course of business under the Credit Facility; (x) assume, guarantee or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person except its Subsidiaries; (xi) make or forgive any loans, advances or capital continuations to, or investments in, any other Person other than advances to officers or employees in the ordinary course of business consistent with past practice; (xii) increase the compensation (or benefits) payable to or to become payable to any director, officer or other employee, except for payments of bonuses not to exceed the amounts set forth on Section 5.2(b) of the Company Disclosure Schedule, increases in salary or wages of non-officer employees in the ordinary course of business and consistent with past practice or pursuant to any existing employment agreements of the Company; (xiii) establish, adopt, amend enter into, materially amend, or terminate any Benefit Plan or amend the terms of any outstanding equity-based awards, (iv) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of compensation rights or benefits under any Benefit collective bargaining agreement or any Plan; (xiv) effect any reorganization or recapitalization; (xv) pay, to discharge, settle or satisfy any claims, liabilities, obligations or litigation (absolute, accrued, asserted or unasserted, contingent or otherwise) in excess of $250,000 individually and $500,000 in the extent not already provided aggregate, other than the payment, discharge, settlement or satisfaction in any such Benefit Planthe ordinary course of business or in accordance with their terms, of liabilities disclosed, reflected or reserved against in the most recent consolidated financial statements (v) change any actuarial or other assumptions used to calculate funding obligations with respect to any Benefit Plan or to change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP; or (vinotes thereto) forgive any loans to directors, officers or employees of the Company included in the Company SEC Reports or incurred since the date of such financial statements in the ordinary course of business, or cancel any indebtedness in excess of its Subsidiaries;
$50,000 individually and $500,000 in the aggregate; (pxvi) take any action that would reasonably be expected to: (A) prevent, impair or omit materially delay the ability of the Company, Parent or Merger Sub to take any action that is reasonably likely to result in consummate the Merger or (B) cause any of the conditions to the consummation of the Merger set forth not to be satisfied; (xvii) make or change any Tax election, file any amended Tax Return, enter into any closing agreement, settle or compromise any liability with respect to Taxes, agree to any material adjustment of any Tax attribute, file any claim for a refund of Taxes, or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment; or (xviii) agree in Article VII not being satisfied;
(q) take any action that would violate the CIA;
(r) knowingly take writing or permit any of its Subsidiaries otherwise to take any action that is reasonably likely to prevent the consummation of the Merger; or
(s) agree, authorize or commit to do any of the foregoingforegoing actions.
Appears in 1 contract
Sources: Agreement and Plan of Merger (DRS Technologies Inc)